"I Don't Want Malays
in Public Service"
Diam wants Malays to get out of out of civil service, face the world and fight to survive. like the Chinese. By Seah Chiang Nee
Apr 26, 2001

"A few soft-spoken words into one receptive ear of the Prime Minister is better than 20 years of talking hard in Parliament."

Former Agriculture Minister Sanusi Junid used to tell this to close friends when talking about politics in Malaysia - and probably much of Asia.

For this reason, if you had asked any Malaysian who was the second most powerful man in Malaysia, he would probably have replied: Daim Zainuddin, Finance Minister and UMNO Treasurer.

Because he had both Dr. Mahathir's ears and his trust, the Finance Minister's words had helped to shape Malaysia's economic policies for 20 years. This is no longer true.

The relationship has since soured and Mr. Daim - so the speculation goes - may soon be out of the cabinet.

What sort of man was he? A book "Daim - The Man Behind The Enigma" published six years ago gives an indication. It was based on interviews given to two well-known women journalists, Cheong Mei Sui and Adibah Amin.

It is easy to understand why he commanded so much influence. What he advocated - a free market, a competitive environment, privatisation and reduction of government size - had helped to reshape Malaysia, especially the Malays.

With Dr. Mahathir's heavy industrialisation, it had turned Malaysia into a rapidly developing nation, vastly improved its competitiveness against its neighbours, including Singapore.

Many of Mr. Daim's concepts are based less on race and emotions than on hard realism. Some are close to what Singapore leaders would do under similar cumstances.

Take the 1985-86 recession. As finance minister, he immediately tightened everyone's belt, including pruning the huge, cumbersome civil service, freezing employment - although short of cutting pay that the republic did.

But that was enough to earn him widespread criticism because the public service was the place the Malays had always relied on for jobs.

With recruitment frozen, where would they go? More than 60,000 graduates became unemployed. Almost all were Malays. They became a pressure group. The next move was to do away with the pension scheme for government servants.

The Malays came to complain to him.

"Good," said Mr. Daim. "I don't want Malays to join the public sector." He said the British colonialists had wanted it that way, to have the Malays in cosy, easy and relaxed jobs.

"The challenge is outside. The Malays must go out. Face the world. Fight to survive," he said. The service does not produce millionaires unless through corruption, only the corporate world can."

Mr. Daim also revealed the circumstances leading to Malaysia's decision to break up the Singapore-Malaysia stock exchange, blaming it on the 1985 Pan Pacific crisis.

It went into receivership to head off panic selling of its shares, the Singapore authorities decided to suspend the market.

Monetary Authority of Singapore Managing Director Joe Pillai called Mr. Daim on a Sunday on the eve of the closure and said it would close for three days. The Kuala Lumpur side had to make its own decision.

The shares were traded jointly in both places. The KL side had no choice but to close, too, to prevent dumping of shares on Malaysia.

"It was then that Daim decided the exchange should be split to give Malaysia control of its own market," the book alleged. That and, of course, the vast financial potentials of an independent market.

But in his interview, Mr. Daim paid tribute to where it was due especially on the strong Sing-dollar, which he said, had raised some jealousy in the early days. Mr. Daim said he had explained to the Malays that it was due to Singapore's superior economic performance and efficiency.

It was the same with the stock market. People bought Malaysian shares in Singapore because it was more efficient and the brokers there had bigger capital bases to handle huge volumes.

Then when Singapore set up CLOB after the split, the Malaysian cabinet was unhappy but he took a different stand. The split had bought chaos to a hot market when Malaysian brokers could not handle the volumes. Millions of shares went missing.

If it had not been for CLOB, the problem would have been much worse, Mr. Daim said, and no foreigner would come to invest in Malaysia.

Mr. Daim defended charges that he had enriched himself through his closeness to Dr. Mahathir and the control he had of the multi-billion dollar UMNO corporate empire.

He said he had always separated his own personal interests and those of the country and party. In fact, he said he had lost financially in serving the country, hence his resignation. His book also brought out some aspects of the personal relations between Senior Minister Lee Kuan Yew and Dr. Mahathir Mohamad.

When Dr Mahathir suffered from a heart attack in 1989 which needed a bypass, Mr. Lee (who was then Prime Minister) made many calls on his treatment.

The night before the operation, Mr. Lee contacted Mr. Daim and suggested he contact the (now late) Australian cardiac surgeon Victor Chang after obtaining Dr. Mahathir's consent.

Mr. Daim rang the hospital and was told the doctors had already begun preparation, so he rang Mr. Lee back to tell him it was too late.

Mr. Lee offered to fly Dr. Chang to Kuala Lumpur and said the Singapore government would bear all costs. He said it was worth delaying the operation for 24 or 48 hours. Dr. Chang (who was my heart transplant surgeon) had done 1,000 operations, he said.

Mr. Daim told Dr. Mahathir's wife, Mrs (Dr) Siti Hasmah but she said since her husband had wanted local doctors to do it, the family would honour his wish.

"Kuan Yew said he was very concerned: he did not want to lose a friend," he said. After the bypass, he called Mr. Daim four times to check on Dr. Mahathir's condition.

It was reciprocated when Dr. Mahathir later made a quick trip to Singapore to visit Brig-General Lee Hsien Loong when he was admitted to hospital for cancer treatment, when he himself was fighting a crucial by-election in Johor.

What was his biggest regret, he was asked. It was the failure to introduce a Singapore-type goods and services tax. He saw this switch from taking earnings to taxing consumption as vital for Malaysia's competitiveness.

People are waiting to see if he remains - in the words of Senior Minister Lee "a shaker and mover of events."

Seah Chiang Nee