MAY 6, 2002


Malaysia: A Surprising Ally in the War on Terror

By Frederik Balfour in Kuala Lumpur, with Stan Crock in Washington

For years, Malaysia's Prime Minister, Mahathir Mohamad, has been the bad boy of Asian politics. When Malaysia's currency collapsed in 1997, he blamed foreign traders--and later slapped on controversial capital controls. Then, he ignored the howls of the Clinton Administration after he arrested, tried, and imprisoned his potential rival, former Deputy Prime Minister Anwar Ibrahim, on trumped-up charges.
But in recent months, the leader known for bashing the West has suddenly become its ally. President George W. Bush is expected to welcome Mahathir warmly when he arrives at the White House on May 14 for his first visit since 1994. The reason: Mahathir is playing a key role in the war on terrorism. Since September 11, Malaysian police have detained more than 60 alleged terrorists under the country's Internal Security Act, which allows suspects to be held without trial for two years. The latest round of 14 arrests came on Apr. 18.
Mahathir is also presenting himself as the Islamic world's moderate voice, stirring controversy at a recent summit of Muslim countries by calling suicide bombers terrorists. "Obviously the world has changed," says Abdul Razak Baginda, executive director of the Malaysian Strategic Research Center in Kuala Lumpur. Mahathir's government is "willing to take a middle ground and to cooperate with the U.S.," adds Daryl M. Plunk, senior fellow at Washington's Heritage Foundation.
Ever the pragmatist, Mahathir, 76, seems intent on using the war against terrorism to repair relations with the U.S. and increase his stature on the global stage. That could bring benefits such as new investment from the U.S., Malaysia's No. 1 trading partner. American companies gained the Malaysian government's approval for $870 million in investments last year, but only a tiny portion came from new investors. Mahathir wants to attract new companies as well as keep the likes of Motorola Inc. and Hewlett-Packard Co. from shifting production to lower-cost China.
Perhaps even more important for Mahathir, however, are his political reasons for combating terror. By wielding the security act against alleged extremists, he is strengthening his grip on power while sending a warning to any rivals from the opposition or within his United Malay National Organization (UMNO). "Mahathir is riding on the issue of September 11 for his own political purposes. He has been very aggressive," says Hatta Ramli, a top official of the opposition Islamic Party of Malaysia (PAS), which aims to make Malaysia a fundamentalist state. Mahathir sent a signal in August when police arrested the son of PAS leader Nik Abdul Aziz for allegedly plotting with regional groups to establish Islamic rule. With the opposition weakened, UMNO recently won two by-elections, seen as a vote of confidence in Mahathir's crackdown.
Will Mahathir and Bush open a new chapter in U.S.-Malaysian ties? The two governments are likely to boost cooperation in fighting terrorism. Malaysia has already provided key intelligence on the September 11 hijackers and al Qaeda. For its part, the Bush Administration is turning a blind eye to Mahathir's liberal use of the security act--in contrast to the Clinton Administration, which criticized it.
Some experts believe the Bush Administration may one day regret its tacit blessing of Mahathir's tough tactics. It's also possible the sharp-tongued leader won't be able to give up his old habit of blasting the U.S. from time to time. For now, though, rhetoric is unlikely to bother the Bush camp much--as long as Mahathir keeps working on his legacy as Islam's moderate statesman and anti-terror warrior.