M's "Right Hand"
Is he really gone?
A growing rift may have broken up the Mahathir-Daim Zainuddin team. Bet is the Treasury will soon have a new man soon. By Seah Chiang Nee
Apr 25, 2001

Déjà vu, some journalists say. Today's leadership atmosphere in Malaysia resembles the months before September 1998 when Dr. Mahathir Mohamad moved against Mr. Anwar Ibrahim.

At the time, there were innuendoes, cynical comments and of course, baffling happenings - as there are now - that suggested things were not well between the two men.

No one would say openly that the Deputy Prime Minister was on the way out, but there were hints galore that he was in hot soup.

When the book "50 reasons why Anwar can't be Prime Minister" was published, I was in Kuala Lumpur. One day over lunch I asked Dr. Mahathir's trusted press secretary whether it signalled the end of Anwar's career or was it a "last warning" to behave.

He smiled and gave no reply. His silence was answer enough.

This time it's over the fate of another powerful man - Mr. Daim Zainuddin, 63. He has gone on a two-month extended leave under the same circumstances of innuendoes and whispers.

Word is that he has handed (either voluntarily or was asked to) an undated letter of resignation as finance minister and whether he resumes work or not will depend on the Prime Minister.

The current bet is - he will not.

For Malaysia, it is a major development whose costs have yet to be counted; for Mr. Daim, a big blow.

His leave was announced only days after Dr. Mahathir appointed former central bank chief Ali Abul Hassan Sulaiman as economic adviser, the second in a year.

This had meant a greater erosion of the finance minister's influence. The two men were so close that even senior party insiders don't really know what to make of it.

Actually rumours of a growing rift had been around for a year.

"They are inseparable," one former minister once told me. If there was any person that Dr. Mahathir really trusted, it was Daim, he said, adding: "When Daim quits, you'd know it is Mahathir's last term."

Unsurprisingly the rank-and-file view it as a temporary spate, a blowing off of steam, after which Mr. Daim will be back at work because each needs the other.

Another theory: It's just a shadow play, engineered by both men to lighten public pressure on the government over money politics and the use of public funds to bail out UMNO cronies.

For more than a year, signs of a rift were evident, genuine differences over bank restructuring and the use of Employees Provident Fund (EPF), which belongs to ordinary workers, to bail out connected businessmen.

The losses have been substantial, even for good times, but these are not. The fall-out has yet to come.

For Malaysia these are bad times - political uncertainties, a weakening economy, capital flight, poor investor confidence.

There's little talk about Wawasan 2020 these days - becoming an advanced nation in 20 years' time.

Now people are worried about Malaysia's economic policy - after Mr. Daim. For 20 years of Mahathir rule, the dapper, diminutive lawyer has played a major role in shaping it.

For Singapore, an immediate effect is a likely delay in resolving bilaterial issues with Malaysia, including railway land, location of immigration checkpoint, withdrawal of CPF, and, of course, water.

Both countries are keen to resolve them. Daim was to have represented Malaysia. If he's out, a new man may have to be found - and new preparations required.

Mr. Daim is basically a free marketeer, a believer in privatisation, tax cuts and downsizing government, concepts that are admired in Singapore.

When recession struck in 1987, he was a strong advocate - announced by Dr. Mahathir - that the New Economic Policy (that provides special rights to Malays) be held in abeyance.

He never liked politics, preferred to wheel and deal and make money, which is easier if you have the Prime Minister's ears. One charge - which he denies - is that he has used it to enrich himself.

Reputed to be one of Malaysia's richest men, Mr. Daim is arguably the most controversial finance minister in his country. Liberals - and reformists - dislike him as the symbol of money politics and cronyism.

That doesn't seem to bother him: "I'm a prisoner of other people's fixed ideas about me," he once said. And since you can't change that I don't bother to try."

It is compounded by an introverted, aloof personality that is frequently interpreted as hostile. His blunt uncompromising ways have alienated both civil servants and even party influentials.

M's baffling comment

Dr. M made a baffling comment when he said his finance minister was "visiting the office to go through all his documents and letters", comfortably in slippers at the Treasury while on leave.

This led opposition leader Lim Kit Siang to ask: "Who is "signing" the documents and papers as Finance Minister?

He said Mr. Daim should explained why he had not signed and gazetted the Ministerial order for a two per cent cut (from 11-9 per cent) in employees' EPF contribution for it to become law from April 1.

It had almost been a month since it was announced by the Prime Minister when introducing the RM3 billion economic stimulus package on March 27, 2001."

Without it, the reduction was an unlawful act and open to a court challenge said Mr. Lim, adding:

"Why had not Mr. Daim signed and gazetted it four weeks later? "Is it because he is now no more the person who should be signing such papers as the Finance Minister?"

Or was it a deliberate refusal on his part a sign of protest in his deepening rift with Dr. Mahathir?

During his leave in the next two months, would he still be able to sign as the Finance Minister? If not, who would take over the signing function since there would be no acting Finance Minister?

Would the Prime Minister take over the function himself?

Mr. Lim said: "Daim's aide has claimed that apart from not attending Cabinet meetings, Daim's routine as Finance Minister is unchanged and that he would (on Monday) officiate the International Seminar on Corporate Finance.

Then finally, would the finance minister continue to take responsibility for the large losses of EPF funds for the recent bailout of listed companies.

Seah Chiang Nee