Interview with Tun Mahatir Mohamad

Reading Time: 10 minutes
mahatir1
Tun Dr. Mahatir Mohamad

Tun Dr. Mahatir Mohamad, Malaysia’s longest serving prime minister who held the post for 22 years from 1981 to 2003, is still a critical observer of Malaysian politics and not shy of voicing his opinion. Inside Investor caught up with the Honorary President to hear his views on current issues.

By Imran Saddique

Q: Let’s begin with the ASEAN integration that has become a hot topic. Would you say the ten-member bloc is ready for integration?

A: We are doing this stage-by-stage, we are not rushing forward. We can see that Europe has many problems in their Union, and we need to study these problems and then decide how close we get to each other in ASEAN. By 2015, we are supposed to have an agreement through which taxes on imports and exports and all that would be reduced, not abolished.

Q: Do you think that ASEAN could have a common currency like in Europe?

A: In my opinion, it would be better to have a trading currency. Every country could retain its currency, but for the purpose of trade there could be a trading currency based on gold, which would prevent it from being devalued all the time. At the moment, there is no proposal at all for a common currency, but neither for a trading currency which would be much more beneficial. Presently, all payments are made in US dollar, but the US dollar is not stable as we have seen with the depreciation and appreciation versus the ringgit in the recent past.

Q: What is your stance towards the Trans-Pacific Partnership, or TPP? Does Malaysia need the TPP?

A: Malaysia doesn’t need the TPP. We have good trade relations with many countries in the world, and trade is growing well without the TPP. It would in fact reduce free trade because it has certain clauses and provisions that we would have to adhere to. For example, if we failed to do so, companies could take action against the government which would be put before arbitration or tribunals of sorts. We won’t know who they are and what their philosophy is but we would put us in the position to get sued by these companies.

Q: In Malaysia, people are now saying that the country has run into a bit of an economic mess. The economy slowed down in 2013, as well as infrastructure projects. What are your views on that?

A: Frankly, I think that the management of the finances of the country is not done quite well. It’s not what we would expect. Government spending has gone up, borrowings have gone up, there is still growth but mainly through government spending alone. The growth rate is relatively high, but there is a deficit both in terms of our trade balance, as well as in the government’s budget.

Q: Are there austerity measures to expect? The Malaysian deputy finance minister recently said that people are ungrateful, for example for getting fuel subsidies. Is this smart for a politician to say that?

A: The subsidy for petrol is very big and a huge cost factor for the country. And of course, when people get used to low petrol prices, every increase causes a lot of resentment. But the government needs to reduce the subsidies. In fact, even at the current level, the price is still low when compared to most of the countries in our region. However, people don’t compare the prices but are just unhappy instead. It will take time for them to adjust.

Q: When do you think the developed nation status will be reached by Malaysia? Plans are for 2020, but some politicians say it is possible as early as 2018.

A: We have been planning for 2020 as per our vision. In terms of annual per-capita income, which stands at nearly $10,000 now, we are almost there. But in terms of the actual standard of living for the people, we think it will take some more time to achieve the goal of being a developed country.

Q: There were recent studies that said corruption is still prevalent in Malaysia. Has something gone wrong with the government’s anti-graft drive?

A: There has always been corruption, but these days it seems to be more than at other times. The government is trying its best to stop it, but they need to take certain measures other than just punish people after they committed their crime. There should be more preventive measures.

Q: What is your view on the Crime Prevention Act that just came through?

A: Before, we wanted to be liberal and have the same standards as developed nations, but whether the people are ready for it is another question. After we removed the Prevention of Crime Ordinance, those people who were under restricted residence such as criminals and entire gangs were allowed to be freed. They came back and reorganised their activities, and that’s why crime rates went up again. So, the government decided we should not be that liberal in terms of criminals who are likely to undermine the stability of the country. That’s why the new law has been introduced.

mahatir2
Tun Dr. Mahatir Mohamad with Inside Investor’s Director Imran Saddique and Aurora Filpi

Q: During your time as prime minister of Malaysia, there was a lot of stability. But in the recent elections, the opposition came very close to the ruling party. Do you think there are issues in Malaysia that have not been properly addressed by the current government?

A: I always thought that after I stepped down policies would change and with it the economic strategy. As a result, there was lots of support for the government at the beginning. But in the 2008 elections, for the first time the ruling party could not achieve a two-thirds majority, and in the 2013 election it was even worse. I think the government should restudy its financial policy and see where it should put the money. Currently, there is money given to people practically for nothing – for the people it’s a small amount but for the government it’s big. This is hurting the balance in the government’s budget.

Q: Should we also see changes in other policies or certain things to be addressed to restore the vote of confidence?

A: When there is a change in leadership, particular in the prime minister, the new generation wants to make their mark on the progress of the country. Some of the policies of the past have been reversed or changed, but as a result people were feeling that the government is not doing the right thing and stopped voting for them. That’s why the results of the latest elections haven’t been as before. During my time, we were used to winning two thirds of the seats in parliament, but since 2008 the number of seats is much less. This gives the impression of a very weak government. And once it shows weakness, the opposition of course starts to undermine the people’s confidence in the government.

Q: How can the people be brought back?

A: I don’t see that happening. The current policies of the government are not such that would make confidence return easily.

Q: What do you think was your own biggest achievement?

A: I was dubbed a Malay extremist when I became prime minister in 1981. But I received support from all communities, and in all five elections that I fought I won a two-thirds majority. What I would call my achievement is that I did not have the kind of racial confrontation in the country as it is now, instead always got support from all groups.

Q: Do you feel proud that you made Malaysia a multi-racial, multi-cultural society living in harmony between the races?

A: Malaysia has grown and developed quite remarkably during all those years. The antagonistic race feeling was not very prominent at that times, but somehow now race has become a very big issue. There is no longer that cooperation between the races in order to support the government and stabilise the economy.

Q: Isn’t it more about income equality and poverty rather than about race, the latter an agenda that might have been pushed?

A: Well, there is a new economic policy to bring up the poorer race in order to enjoy the same standard as the wealthier race. This new economy targets the indigenous people which feel a great disparity because of differences in income and wealth. But when a particular race is being identified with disadvantages, their feeling becomes even stronger, and this is building up tensions. The new policy was designed to end the disparity, but now there is the perception that the poor are the Malays and the rich are the Chinese. Racial loyalty is one thing, but ending the disparity in the share of the wealth in this country is another. The thing I am happy about is that during my time we didn’t have that kind of racial confrontation as we are having now. I mean, race is not something that is bugging the people, and we managed to reduce the differences between the rich and the poor apart from racial connotations. The country became stable, the economic growth continued and was even higher in times when there were no racial confrontations. Of course, now, the world economy is not doing well, and we as a trading nation are feeling the impact. But the main problem is about race conflict which needs to be addressed by the government so that there will be less disharmony between the races. People need to feel that the government is helping them to lead a decent live.

Q: Malaysian people remember Tun Mahatir as a prime minister who stamped his mark, stood up to the West, particularly to the IMF. The Petronas Towers were coming up, and many other legacies have been left behind. Would you like to be prime minister again?

A: Well, I am sure I will not be prime minister again, nor do I have any ambition to return as prime minister. But I participate in the activities of the governing party because I long was in the same party.  There are some policies that need attention, such as the race issue. This needs to be explained to the politicians. Of course they want to set their own mark and change policies, but apparently the people are not very supportive of that. Malaysia, in fact, is a very special case. In other countries, people who accept citizenship also accept along with it the national language, the culture and all that. Here, we agree that people should retain their country of origin’s culture, language, etc., down to the schools. This is very divisive and cannot be corrected in the short term.

Q: How important is conviction in a leader and to enforce it, for example against large organisations such as the IMF?

A: Well, we are an independent country, but being legally independent is not enough. In the IMF case, we had to show that we object to other people’s policies and we don’t have to follow them. We believe in showing our independence ideologically, and although we are a trading nation, we do not allow our trading partners to reduce the benefits of trading with them and to pressure us. That’s what a leader should be doing. However, today the idea is different – we want to show that we are part of global community. During the Asian financial crisis we refused to bow to the pressures of the IMF and the World Bank, and we found our own way out. If we would have submitted to the IMF, they would have controlled our economy, but we didn’t allow this. However, presently, the government tries to accommodate views from abroad.

mahatir4Q: How did you take the historic decision against an involvement of the IMF in Malaysia?

A: It was a frightening thing to go against almost everyone else in the rest of the world. We are a small country, and we did something that nobody had ever done. But when we examined the advice of the IMF, we saw that it would only worsen our situation in the crisis by raising the interest rate, lowering the performance of loans so that businesses go bankrupt – these were the ingredients of disaster. We tried another way of getting out of that crisis, condemned by the rest of the world, but we succeeded. Today we see that many countries do what they told us not to do. They are not always right. We can be right also. We can manage our finances and economy just as well as others. The IMF didn’t care what would happen to our people, they were only thinking about the money. But we needed to think what the impact on our people would be to avoid big social problems. The last finance minister in this country who took advice from the IMF worsened things and subsequently left the government. We did the right thing, but it was very frightening with the whole world telling me that Malaysia would go bankrupt.

Q: What will then happen to Malaysia if it opens up more and gives other countries more influence?

A: I think we should retain our independent stance. If we are seen to be following some other power and associating with them and not with their enemies, we will get embroiled in a kind of confrontation that is not good for us. We are friends with China and also with the West, but in issues that affect our country we are not committed to either the capitalist or the socialist world. We are on our own and want to be independent. In this respect, confidence of the leadership is very important. If they are confident, they can have their own stance on issues and still continue to grow the economy and be strong.

Q: What is the best that Malaysia has to offer?

A: The best Malaysia has to offer, both to investors and tourists, is the stability of the country. The stability is due to the country being governed by the same party since independence. If the opposition would rule the country, they would want change – even in terms of their attitude towards foreign investors, and maybe there would come instability due to these changes. All these things would make Malaysia less attractive. The country is not ready to see radical changes in the policy of the government.

Q: Where do you see Malaysia in ten, fifteen years?

A: I hope that the opposition will not win and change the policy. However, if the ruling party is unable to sustain the support of the people, then the future of Malaysia may see a lot of instability.

Q: Do you feel you have a role to play in where Malaysia goes to or needs to go to?

A: I have promised that, after I step down, I will not interfere in politics, and the current government has every right to change direction and policies. But at times when I feel something goes the wrong way I feel the need to speak out, and sometimes I am also asked to voice my opinion. I am not critical of the government, and each leader has his own way and his own policy. But when I feel a likelihood of the government party to lose, then I feel I need to voice my views.

Q: Does this bear fruit, and are people – especially in the government – listening?

A: Well, the government wants to be independent and not follow the previous government. Sometimes I think that they do take notice of what I say, but not very much. I am no longer prime minister, and I don’t have any power now. Whatever they want to do is their right to do.

Q: What is your view on the recent debate on the use of the word “Allah” by non-Muslims?

A: We are a stable country and we don’t have any conflicts over religion. Around 60 per cent of the population is Muslim, and we have the Chinese, Buddhists, Hindus and Christians in this nation. We don’t fight about religion, although there are certain sensitive issues. While the word “Allah” is used in other countries, it has never been used here. But when we incorporated Sabah and Sarawak into the nation, we had Christians there who started to use our language and began referring to their Christian God as “Allah” in the Malay translation. We don’t want to stop that, but we also don’t want them to spread this to other areas because this creates undue animosity. There is no basis for them to use the word “Allah”, as obviously “Allah” only came about when Islam came. Christian scriptures never mentioned “Allah” before, not even in their own languages. Christian missionaries want to spread the word that we all worship the same God and they started to call him “Allah” here – that’s the Christian explanation to people they want to convert. In Malaysia, there never has been an attempt to convert Muslims to Christianity because as per an historic agreement with the British this is not allowed. The Christians can spread their message to the Hindus and the Buddhists, but there should be no attempt to convert Muslims to Christianity. Because of that, there long was no conflict. Of course, we are both followers of monotheistic religions, but using “Allah” in a Christian context just causes a lot of enmities within people – so it is better that they don’t. We have our arguments, they have their arguments, but why bring this up – using the word “Allah” as if it was the same religion. This causes a lot of confusion.

 

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Reading Time: 10 minutes

Tun Dr. Mahatir Mohamad

Tun Dr. Mahatir Mohamad, Malaysia’s longest serving prime minister who held the post for 22 years from 1981 to 2003, is still a critical observer of Malaysian politics and not shy of voicing his opinion. Inside Investor caught up with the Honorary President to hear his views on current issues.

Reading Time: 10 minutes

mahatir1
Tun Dr. Mahatir Mohamad

Tun Dr. Mahatir Mohamad, Malaysia’s longest serving prime minister who held the post for 22 years from 1981 to 2003, is still a critical observer of Malaysian politics and not shy of voicing his opinion. Inside Investor caught up with the Honorary President to hear his views on current issues.

By Imran Saddique

Q: Let’s begin with the ASEAN integration that has become a hot topic. Would you say the ten-member bloc is ready for integration?

A: We are doing this stage-by-stage, we are not rushing forward. We can see that Europe has many problems in their Union, and we need to study these problems and then decide how close we get to each other in ASEAN. By 2015, we are supposed to have an agreement through which taxes on imports and exports and all that would be reduced, not abolished.

Q: Do you think that ASEAN could have a common currency like in Europe?

A: In my opinion, it would be better to have a trading currency. Every country could retain its currency, but for the purpose of trade there could be a trading currency based on gold, which would prevent it from being devalued all the time. At the moment, there is no proposal at all for a common currency, but neither for a trading currency which would be much more beneficial. Presently, all payments are made in US dollar, but the US dollar is not stable as we have seen with the depreciation and appreciation versus the ringgit in the recent past.

Q: What is your stance towards the Trans-Pacific Partnership, or TPP? Does Malaysia need the TPP?

A: Malaysia doesn’t need the TPP. We have good trade relations with many countries in the world, and trade is growing well without the TPP. It would in fact reduce free trade because it has certain clauses and provisions that we would have to adhere to. For example, if we failed to do so, companies could take action against the government which would be put before arbitration or tribunals of sorts. We won’t know who they are and what their philosophy is but we would put us in the position to get sued by these companies.

Q: In Malaysia, people are now saying that the country has run into a bit of an economic mess. The economy slowed down in 2013, as well as infrastructure projects. What are your views on that?

A: Frankly, I think that the management of the finances of the country is not done quite well. It’s not what we would expect. Government spending has gone up, borrowings have gone up, there is still growth but mainly through government spending alone. The growth rate is relatively high, but there is a deficit both in terms of our trade balance, as well as in the government’s budget.

Q: Are there austerity measures to expect? The Malaysian deputy finance minister recently said that people are ungrateful, for example for getting fuel subsidies. Is this smart for a politician to say that?

A: The subsidy for petrol is very big and a huge cost factor for the country. And of course, when people get used to low petrol prices, every increase causes a lot of resentment. But the government needs to reduce the subsidies. In fact, even at the current level, the price is still low when compared to most of the countries in our region. However, people don’t compare the prices but are just unhappy instead. It will take time for them to adjust.

Q: When do you think the developed nation status will be reached by Malaysia? Plans are for 2020, but some politicians say it is possible as early as 2018.

A: We have been planning for 2020 as per our vision. In terms of annual per-capita income, which stands at nearly $10,000 now, we are almost there. But in terms of the actual standard of living for the people, we think it will take some more time to achieve the goal of being a developed country.

Q: There were recent studies that said corruption is still prevalent in Malaysia. Has something gone wrong with the government’s anti-graft drive?

A: There has always been corruption, but these days it seems to be more than at other times. The government is trying its best to stop it, but they need to take certain measures other than just punish people after they committed their crime. There should be more preventive measures.

Q: What is your view on the Crime Prevention Act that just came through?

A: Before, we wanted to be liberal and have the same standards as developed nations, but whether the people are ready for it is another question. After we removed the Prevention of Crime Ordinance, those people who were under restricted residence such as criminals and entire gangs were allowed to be freed. They came back and reorganised their activities, and that’s why crime rates went up again. So, the government decided we should not be that liberal in terms of criminals who are likely to undermine the stability of the country. That’s why the new law has been introduced.

mahatir2
Tun Dr. Mahatir Mohamad with Inside Investor’s Director Imran Saddique and Aurora Filpi

Q: During your time as prime minister of Malaysia, there was a lot of stability. But in the recent elections, the opposition came very close to the ruling party. Do you think there are issues in Malaysia that have not been properly addressed by the current government?

A: I always thought that after I stepped down policies would change and with it the economic strategy. As a result, there was lots of support for the government at the beginning. But in the 2008 elections, for the first time the ruling party could not achieve a two-thirds majority, and in the 2013 election it was even worse. I think the government should restudy its financial policy and see where it should put the money. Currently, there is money given to people practically for nothing – for the people it’s a small amount but for the government it’s big. This is hurting the balance in the government’s budget.

Q: Should we also see changes in other policies or certain things to be addressed to restore the vote of confidence?

A: When there is a change in leadership, particular in the prime minister, the new generation wants to make their mark on the progress of the country. Some of the policies of the past have been reversed or changed, but as a result people were feeling that the government is not doing the right thing and stopped voting for them. That’s why the results of the latest elections haven’t been as before. During my time, we were used to winning two thirds of the seats in parliament, but since 2008 the number of seats is much less. This gives the impression of a very weak government. And once it shows weakness, the opposition of course starts to undermine the people’s confidence in the government.

Q: How can the people be brought back?

A: I don’t see that happening. The current policies of the government are not such that would make confidence return easily.

Q: What do you think was your own biggest achievement?

A: I was dubbed a Malay extremist when I became prime minister in 1981. But I received support from all communities, and in all five elections that I fought I won a two-thirds majority. What I would call my achievement is that I did not have the kind of racial confrontation in the country as it is now, instead always got support from all groups.

Q: Do you feel proud that you made Malaysia a multi-racial, multi-cultural society living in harmony between the races?

A: Malaysia has grown and developed quite remarkably during all those years. The antagonistic race feeling was not very prominent at that times, but somehow now race has become a very big issue. There is no longer that cooperation between the races in order to support the government and stabilise the economy.

Q: Isn’t it more about income equality and poverty rather than about race, the latter an agenda that might have been pushed?

A: Well, there is a new economic policy to bring up the poorer race in order to enjoy the same standard as the wealthier race. This new economy targets the indigenous people which feel a great disparity because of differences in income and wealth. But when a particular race is being identified with disadvantages, their feeling becomes even stronger, and this is building up tensions. The new policy was designed to end the disparity, but now there is the perception that the poor are the Malays and the rich are the Chinese. Racial loyalty is one thing, but ending the disparity in the share of the wealth in this country is another. The thing I am happy about is that during my time we didn’t have that kind of racial confrontation as we are having now. I mean, race is not something that is bugging the people, and we managed to reduce the differences between the rich and the poor apart from racial connotations. The country became stable, the economic growth continued and was even higher in times when there were no racial confrontations. Of course, now, the world economy is not doing well, and we as a trading nation are feeling the impact. But the main problem is about race conflict which needs to be addressed by the government so that there will be less disharmony between the races. People need to feel that the government is helping them to lead a decent live.

Q: Malaysian people remember Tun Mahatir as a prime minister who stamped his mark, stood up to the West, particularly to the IMF. The Petronas Towers were coming up, and many other legacies have been left behind. Would you like to be prime minister again?

A: Well, I am sure I will not be prime minister again, nor do I have any ambition to return as prime minister. But I participate in the activities of the governing party because I long was in the same party.  There are some policies that need attention, such as the race issue. This needs to be explained to the politicians. Of course they want to set their own mark and change policies, but apparently the people are not very supportive of that. Malaysia, in fact, is a very special case. In other countries, people who accept citizenship also accept along with it the national language, the culture and all that. Here, we agree that people should retain their country of origin’s culture, language, etc., down to the schools. This is very divisive and cannot be corrected in the short term.

Q: How important is conviction in a leader and to enforce it, for example against large organisations such as the IMF?

A: Well, we are an independent country, but being legally independent is not enough. In the IMF case, we had to show that we object to other people’s policies and we don’t have to follow them. We believe in showing our independence ideologically, and although we are a trading nation, we do not allow our trading partners to reduce the benefits of trading with them and to pressure us. That’s what a leader should be doing. However, today the idea is different – we want to show that we are part of global community. During the Asian financial crisis we refused to bow to the pressures of the IMF and the World Bank, and we found our own way out. If we would have submitted to the IMF, they would have controlled our economy, but we didn’t allow this. However, presently, the government tries to accommodate views from abroad.

mahatir4Q: How did you take the historic decision against an involvement of the IMF in Malaysia?

A: It was a frightening thing to go against almost everyone else in the rest of the world. We are a small country, and we did something that nobody had ever done. But when we examined the advice of the IMF, we saw that it would only worsen our situation in the crisis by raising the interest rate, lowering the performance of loans so that businesses go bankrupt – these were the ingredients of disaster. We tried another way of getting out of that crisis, condemned by the rest of the world, but we succeeded. Today we see that many countries do what they told us not to do. They are not always right. We can be right also. We can manage our finances and economy just as well as others. The IMF didn’t care what would happen to our people, they were only thinking about the money. But we needed to think what the impact on our people would be to avoid big social problems. The last finance minister in this country who took advice from the IMF worsened things and subsequently left the government. We did the right thing, but it was very frightening with the whole world telling me that Malaysia would go bankrupt.

Q: What will then happen to Malaysia if it opens up more and gives other countries more influence?

A: I think we should retain our independent stance. If we are seen to be following some other power and associating with them and not with their enemies, we will get embroiled in a kind of confrontation that is not good for us. We are friends with China and also with the West, but in issues that affect our country we are not committed to either the capitalist or the socialist world. We are on our own and want to be independent. In this respect, confidence of the leadership is very important. If they are confident, they can have their own stance on issues and still continue to grow the economy and be strong.

Q: What is the best that Malaysia has to offer?

A: The best Malaysia has to offer, both to investors and tourists, is the stability of the country. The stability is due to the country being governed by the same party since independence. If the opposition would rule the country, they would want change – even in terms of their attitude towards foreign investors, and maybe there would come instability due to these changes. All these things would make Malaysia less attractive. The country is not ready to see radical changes in the policy of the government.

Q: Where do you see Malaysia in ten, fifteen years?

A: I hope that the opposition will not win and change the policy. However, if the ruling party is unable to sustain the support of the people, then the future of Malaysia may see a lot of instability.

Q: Do you feel you have a role to play in where Malaysia goes to or needs to go to?

A: I have promised that, after I step down, I will not interfere in politics, and the current government has every right to change direction and policies. But at times when I feel something goes the wrong way I feel the need to speak out, and sometimes I am also asked to voice my opinion. I am not critical of the government, and each leader has his own way and his own policy. But when I feel a likelihood of the government party to lose, then I feel I need to voice my views.

Q: Does this bear fruit, and are people – especially in the government – listening?

A: Well, the government wants to be independent and not follow the previous government. Sometimes I think that they do take notice of what I say, but not very much. I am no longer prime minister, and I don’t have any power now. Whatever they want to do is their right to do.

Q: What is your view on the recent debate on the use of the word “Allah” by non-Muslims?

A: We are a stable country and we don’t have any conflicts over religion. Around 60 per cent of the population is Muslim, and we have the Chinese, Buddhists, Hindus and Christians in this nation. We don’t fight about religion, although there are certain sensitive issues. While the word “Allah” is used in other countries, it has never been used here. But when we incorporated Sabah and Sarawak into the nation, we had Christians there who started to use our language and began referring to their Christian God as “Allah” in the Malay translation. We don’t want to stop that, but we also don’t want them to spread this to other areas because this creates undue animosity. There is no basis for them to use the word “Allah”, as obviously “Allah” only came about when Islam came. Christian scriptures never mentioned “Allah” before, not even in their own languages. Christian missionaries want to spread the word that we all worship the same God and they started to call him “Allah” here – that’s the Christian explanation to people they want to convert. In Malaysia, there never has been an attempt to convert Muslims to Christianity because as per an historic agreement with the British this is not allowed. The Christians can spread their message to the Hindus and the Buddhists, but there should be no attempt to convert Muslims to Christianity. Because of that, there long was no conflict. Of course, we are both followers of monotheistic religions, but using “Allah” in a Christian context just causes a lot of enmities within people – so it is better that they don’t. We have our arguments, they have their arguments, but why bring this up – using the word “Allah” as if it was the same religion. This causes a lot of confusion.

 

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