Mahathir Says Abdullah Is Endangering
Malaysian Economic Growth

By Angus Whitley and Haslinda Amin (From Bloomberg.com of October 12, 2006)

Oct. 12 (Bloomberg) -- Malaysian Prime Minister Abdullah Ahmad Badawi, three years in office this month, is jeopardizing economic growth and confidence in his administration is waning, said former leader Mahathir Mohamad.
Abdullah should increase spending on technology rather than boosting agricultural production or signing questionable trade accords, Mahathir, 80, said in an interview. The medical doctor, who led the nation for 22 years until 2003, said he's being sidelined in the media and in Malaysia's ruling party.
"I don't see any new projects coming in which would boost the economy," the former premier said in his office in Putrajaya, south of the capital, Kuala Lumpur. "The last few years, I don't see any change for the better. It is affecting the nation and the growth of the country. It is not personal."
Mahathir, who transformed Malaysia from a tin and rubber exporter into an industrialized manufacturer, is unable to stay out of politics. He's extending a feud that started after Abdullah reversed high-profile investment decisions made under Mahathir in favor of plowing funds into education and health care.
"The fundamental problem with Dr. M. is he feels that what he has done has a right to be continued perpetually," said Abdul Razak Baginda, executive director of the Malaysian Strategic Research Centre. "That's a fallacy for any leader. The current prime minister has a different philosophy. He's concerned with a more balanced development."
Azhar Osman, Abdullah's press secretary, said by phone that the prime minister wouldn't respond to any comments made by Mahathir in the Oct. 9 interview.
In 1991, Mahathir laid out a 30-year plan known as Vision 2020 that aimed to win Malaysia developed-nation status by that date. He accelerated growth by wooing foreign manufacturers, created a technology hub in Cyberjaya, south of Kuala Lumpur, and championed the cause of ethnic Malays. He assured them easier access to housing, education and jobs.
Abdullah announced in March that he plans to increase public development spending 18 percent to 200 billion ringgit ($54 billion) from 2006 to 2010 compared with the previous five years. He allocated a fifth of total spending to education and training, and plans to raise palm-oil output 31 percent by 2010.
Asked if he was optimistic of meeting Vision 2020's objective, Mahathir said, "Right now, I am not." He declined to say whether he regretted picking Abdullah as leader.
The former premier said the government prevents his views appearing in local newspapers, while the movements of members of the ruling United Malays National Organization are engineered to avoid coinciding with those of the former prime minister.
"He doesn't allow me to even meet party members," Mahathir said. "He says he's my friend. On the other hand, he muzzles me."
Mahathir was defeated in a September ballot to select speakers for the November meeting of UMNO, as the party is called. Members were bribed to vote against him, he said.
Mahathir in June said the government's failures included scrapping construction of a bridge to Singapore. In December 2003, less than two months after Abdullah assumed power, he postponed a $3.8 billion rail project. The following month, he scrapped plans to sell 60 percent of the government-owned company managing the Bakun hydroelectric dam project in Sarawak.
"The current government is making an honest and brave effort to put Malaysia on the right track," said Manu Bhaskaran, a Singapore-based partner at economic research company Centennial Group. "It takes a long time before good policies result in a stronger economy, so we need to be patient."
Mahathir in the interview urged Abdullah to raise spending on technology, saying the search for tenants at his brainchild, the Multimedia Super Corridor at Cyberjaya, had been neglected.
"It's not being sufficiently promoted," he said. "There are a lot of companies which would like to come."
The government must be willing to lose money on some information technology investments in return for the chance to profit from a few successful bets, Mahathir said.
"If out of 10 or 20 projects you succeed in one, that is a good result, Mahathir said. "Unfortunately, we are not really able to understand that we have to take risks."
Mahathir also criticized an agreement between Japan and Malaysia to eliminate tariffs on $27 billion of goods within 10 years. The accord, which came into force in July, cut duty on products ranging from clothes to agriculture. Malaysia imports Japanese goods and Japan takes Malaysian fruit and vegetables.
"If you import a car, how many container loads of vegetables are you going to export to Japan?" Mahathir said. "We're not good at that."
Mahathir has a history of verbal volleys. On Oct. 16, 2003, in a speech to the Organization of Islamic Conference, he provoked outrage when he said Jews "rule the world by proxy." In 1997, Mahathir called investor George Soros a "moron." Soros described Mahathir as a "menace to his own country."
Attacks on the administration don't signal a desire to return to power. Mahathir ruled out following former Singapore Prime Minister Lee Kuan Yew, who now holds the position of Minister Mentor in the city-state's cabinet.
"I would never do it," Mahathir said in the interview. "I don't want to enter politics."
Mahathir spends three days a week as honorary president of the Perdana Leadership Foundation, formed in 2003 to promote the ideas of Malaysia's previous prime ministers. He spends two days a week as an adviser to national oil company Petroliam Nasional Bhd. at the Petronas Twin Towers in Kuala Lumpur.


Home Page