186-473: UMNO (1964–2016) BERSATU (2016–2020) PEJUANG (2020–2023) PUTRA (2023–present) Alliance Party (1964–1974) Barisan Nasional (1974–2016) Pakatan Harapan (2017–2020) Gerakan Tanah Air (2022–2023) [REDACTED] Mahathir bin Mohamad ( Jawi : محاضر بن محمد ; IPA: [mahaðɪ(r) bɪn mohamad] ; born 10 July 1925) is a Malaysian politician, author, and doctor who served as
372-631: A National Operations Council (NOC) led by Deputy Prime Minister Tun Abdul Razak of UMNO, taking over the government. Further polling in East Malaysia as a continuation of the general election was also postponed indefinitely. Although the Cabinet still met under the Tunku as Prime Minister, his role was largely symbolic, with Tun Razak taking over the role of chief executive. UMNO backbencher Mahathir Mohamad , who had lost his Parliamentary seat in
558-529: A ripple effect through the financial system and the economy (as well as any connected economies) as a whole. The foreign ministers of the 10 ASEAN countries believed that the well co-ordinated manipulation of their currencies was a deliberate attempt to destabilize the ASEAN economies . Malaysian Prime Minister Mahathir Mohamad accused George Soros and other currency traders of ruining Malaysia's economy with currency speculation . Soros claims to have been
744-510: A " Malaysian Malaysia ", duplicating the effort introduced earlier by Dato' Onn Ja'afar. On 7 August 1965, Prime Minister Tunku Abdul Rahman, seeing no alternative to avoid further bloodshed, advised the Parliament of Malaysia that it should vote to expel Singapore from Malaysia. Despite last-ditch attempts by PAP leaders, including Lee Kuan Yew, to keep Singapore as a state in the union, the Parliament on 9 August 1965 voted 126–0 in favour of
930-489: A $ 40 billion program to stabilize the currencies of South Korea, Thailand, and Indonesia, economies particularly hard hit by the crisis. However, the efforts to stem a global economic crisis did little to stabilize the domestic situation in Indonesia. After 30 years in power, Indonesian President Suharto was forced to step down on 21 May 1998 in the wake of widespread rioting that followed sharp price increases caused by
1116-562: A balance had to be achieved between government support for Malays, so that their economic interests would not be dominated by the Chinese, and exposing Malays to sufficient competition. Mahathir saw Malays as typically avoiding hard work and failing to "appreciate the real value of money and property", and hoped this balance would rectify this. Mahathir criticised Tunku's government in the book, which led to it being banned in Malaysia. The ban
1302-537: A base for Chinese chauvinists to threaten Malayan sovereignty. To balance out the ethnic composition of the new nation, the other states, whose Malay and indigenous populations would balance out the Singaporean Chinese majority, were also included. After much negotiation, a constitution was hammered out with some minor changes. For instance, the Malay privileges were now made available to all " Bumiputra ",
1488-485: A buyer of the ringgit during its fall, having sold it short in 1997. At the 30th ASEAN Ministerial Meeting held in Subang Jaya , Malaysia , the foreign ministers issued a joint declaration on 25 July 1997 expressing serious concern and called for further intensification of ASEAN's cooperation to safeguard and promote ASEAN's interest in this regard. Coincidentally, on that same day, the central bankers of most of
1674-445: A campaign characterising this as a violation of the social contract and constitution . At UMNO's general assembly in 2002, he announced that he would resign as prime minister, only for supporters to rush to the stage and convince him tearfully to remain. He subsequently fixed his retirement for October 2003, giving him time to ensure an orderly and uncontroversial transition to his anointed successor, Abdullah Badawi. On 29 October 2003,
1860-594: A career in medicine, becoming a physician. His involvement in politics began when he joined the United Malays National Organisation (UMNO), Malaysia's leading political party advocating Malay interests. His dedication to the party led him to enter the parliament of Malaysia in the 1964 general election , where he served one term before losing his seat. His relationship with the then-Prime Minister, Tunku Abdul Rahman , deteriorated, leading to his expulsion from UMNO. During his time outside
2046-487: A commission to the region which approved the merger after having delayed the date of Malaysia's formation to investigate. Despite further protests from the Indonesian President, Sukarno , the formation of Malaysia was proclaimed on 16 September 1963. Indonesia then declared a " confrontation " with Malaysia, sending commandos to perform guerilla attacks in East Malaysia (Sabah and Sarawak). The confrontation
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#17327655017142232-459: A constitutional monarchy, the proposed constitution also contained provisions protecting special rights for the Malays, such as quotas in admission to higher education and the civil service, and making Islam the official religion of the federation. It also made Malay the official language of the nation, although the right to vernacular education in Chinese and Tamil would be protected. Although
2418-635: A crushing blow to the IMP. After several other successes in local council elections, the coalition was formalised as an "Alliance" in 1954. In 1954, state elections were held. In these elections, the Alliance won 226 of the 268 seats nationwide. In the same year, a Federal Legislative Council was formed, comprising 100 seats. 52 would be elected, and the rest would be appointed by the British High Commissioner. The Alliance demanded that 60 of
2604-578: A drastic devaluation of the rupiah . The effects of the crisis lingered through 1998, where many important stocks fell in Wall Street as a result of a dip in the values of the currencies of Russia and Latin American countries that weakened those countries' "demand for U.S. exports." In 1998, growth in the Philippines dropped to virtually zero. Only Singapore proved relatively insulated from
2790-579: A further decline in South Korean shares since stock markets were already bearish in November. The Seoul stock exchange fell by 4% on 7 November 1997. On 8 November, it plunged by 7%, its biggest one-day drop to that date. And on 24 November, stocks fell a further 7.2% on fears that the IMF would demand tough reforms. In 1998, Hyundai Motor Company took over Kia Motors. Samsung Motors ' $ 5 billion venture
2976-508: A greater devaluation? This is a relevant tradeoff, but there can be no question that the degree of devaluation in the Asian countries is excessive, both from the viewpoint of the individual countries, and from the viewpoint of the international system. Looking first to the individual country, companies with substantial foreign currency debts, as so many companies in these countries have, stood to suffer far more from… currency (depreciation) than from
3162-474: A group comprising the Malays and other indigenous peoples of Malaysia. However, the new states were also granted some autonomy unavailable to the original nine states of Malaya. After negotiations in July 1963, it was agreed that Malaysia would come into being on 31 August 1963, consisting of Malaya, Singapore, Sabah and Sarawak. Brunei ultimately decided to opt out of the federation due in part to an armed revolt by
3348-425: A high rate of return . As a result, the region's economies received a large inflow of money and experienced a dramatic run-up in asset prices. At the same time, the regional economies of Thailand, Malaysia, Indonesia, Singapore and South Korea experienced high growth rates, of 8–12% GDP, in the late 1980s and early 1990s. This achievement was widely acclaimed by financial institutions including IMF and World Bank , and
3534-511: A highly leveraged economic climate, and pushed up asset prices to an unsustainable level, particularly those in non-productive sectors of the economy such as real-estate. These asset prices eventually began to collapse, causing individuals and companies to default on debt obligations. The resulting panic among lenders led to a large withdrawal of credit from the crisis countries, causing a credit crunch and further bankruptcies. In addition, as foreign investors attempted to withdraw their money,
3720-407: A large number of Indonesian corporations had been borrowing in U.S. dollars. This practice had worked well for these corporations during the preceding years, as the rupiah had strengthened respective to the dollar; their effective levels of debt and financing costs had decreased as the local currency's value rose. In July 1997, when Thailand floated the baht, Indonesia's monetary authorities widened
3906-462: A largely uncontrolled manner to certain people only – not necessarily the best suited or most efficient, but those closest to the centers of power. Weak corporate governance also led to inefficient investment and declining profitability. Until 1999, Asia attracted almost half of the total capital inflow into developing countries . The economies of Southeast Asia in particular maintained high interest rates attractive to foreign investors looking for
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#17327655017144092-421: A leading Anwar supporter, Ahmad Zahid Hamidi , criticised the government for not doing enough to combat corruption and cronyism . As Mahathir took the reins of Malaysia's economic policy over the coming months, Anwar was increasingly sidelined. On 2 September, he was dismissed as deputy prime minister and finance minister and promptly expelled from UMNO. No immediate reasons were given for the dismissal. However,
4278-412: A local coach criticised his decision, Iskandar ordered him to his palace and beat him. The federal parliament unanimously censured Iskandar, and Mahathir took the opportunity to remove the constitutional immunity of the sultans from civil and criminal suits. The press backed Mahathir and, in an unprecedented development, started airing allegations of misconduct by members of Malaysia's royal families. As
4464-590: A narrow margin, receiving the votes of 761 party delegates to Razaleigh's 718. Ghafar defeated Musa by a slightly larger margin. Mahathir responded by purging seven Team B supporters from his ministry. At the same time, Team B refused to accept defeat and initiated litigation. In an unexpected decision in February 1988, the High Courts ruled that UMNO was an illegal organisation as some of its branches had not been lawfully registered. Each faction raced to register
4650-573: A new party under the UMNO name. Mahathir's side successfully registered the name "UMNO Baru" ("new UMNO"), while Team B's application to register "UMNO Malaysia" was rejected. Nevertheless, UMNO Malaysia registered the party as Semangat 46 instead under Tengku Razaleigh Hamzah's leadership. The Lord President of the Supreme Court , Salleh Abas , sent a letter of protest to the Agong, which criticised
4836-539: A platform of opposing Chief Minister Abdul Rahman Ya'kub 's pro-Malay policies, charging them with alienating the rural indigenous natives of Sarawak, such as the Iban . SNAP had been expelled from the Alliance in 1965 for supporting increased autonomy for Sarawak. In the aftermath of the election, Abdul Rahman ordered the detention of James Wong under the Sedition Act. SNAP elected a new leader, Leo Moggie , who secured
5022-567: A precipitous rise in private debt . Foreign debt-to-GDP ratios rose from 100% to 167% in the four large Association of Southeast Asian Nations (ASEAN) economies in 1993–96, then shot up beyond 180% during the worst of the crisis. In South Korea, the ratios rose from 13% to 21% and then as high as 40%, while the other northern newly industrialized countries fared much better. Only in Thailand and South Korea did debt service-to-exports ratios rise. South Korea , Indonesia and Thailand were
5208-473: A result of the crisis. Following the 1997 Asian financial crisis, income in the northeast, the poorest part of the country, rose by 46 percent from 1998 to 2006. Nationwide poverty fell from 21.3 to 11.3 percent. Thailand's Gini coefficient , a measure of income inequality , fell from .525 in 2000 to .499 in 2004 (it had risen from 1996 to 2000) versus 1997 Asian financial crisis. By 2001, Thailand's economy had recovered. The increasing tax revenues allowed
5394-556: A result of the crisis. In May 1997, the Bangko Sentral ng Pilipinas , the country's central bank, raised interest rates by 1.75 percentage points and again by 2 points on 19 June. Thailand triggered the crisis on 2 July and on 3 July, the Bangko Sentral intervened to defend the peso , raising the overnight rate from 15% to 32% at the onset of the Asian crisis in mid-July 1997. The peso dropped from 26 pesos per dollar at
5580-483: A series of bailouts ("rescue packages") for the most-affected economies to enable them to avoid default , tying the packages to currency, banking and financial system reforms. Due to IMF's involvement in the financial crisis, the term IMF Crisis became a way to refer to the Asian Financial Crisis in countries that were affected. The IMF's support was conditional on a series of economic reforms,
5766-406: A series of bold infrastructure projects. Under his leadership, Malaysia transformed from being an agricultural country to a modern, industrial nation. Between 1988 and 1996, Malaysia experienced an 8 percent economic growth rate, during which Mahathir introduced an economic plan, known as The Way Forward or Vision 2020 , aiming for the country to achieve fully developed nation status by 2020. Mahathir
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5952-564: A state of Malaysia . He vociferously attacked Singapore's dominant People's Action Party for being "pro-Chinese" and "anti-Malay" and called its leader, Lee Kuan Yew , "arrogant". Singapore was expelled from Malaysia in Mahathir's first full year in parliament. Despite Mahathir's prominence, he lost his seat in the 1969 election , defeated by Yusof Rawa of the Pan-Malaysian Islamic Party (PAS). Mahathir attributed
6138-696: A state of emergency. However, if he refused to assent to a bill, the bill would return to Parliament, which could then override Agong's veto. On the economic front, Mahathir inherited the New Economic Policy from his predecessors, which was designed to improve the economic position of the bumiputera —Malaysia's Malays and Indigenous peoples —via targets and affirmative action in areas such as corporate ownership and university admission. Like many of his economic liberal contemporaries such as British prime minister Margaret Thatcher , Mahathir actively pursued privatisation of government enterprises from
6324-494: A temporary rise in domestic interest rates…. Thus, on macroeconomics… monetary policy has to be kept tight to restore confidence in the currency.... From the then IMF managing director Michel Camdessus : To reverse (currency depreciation), countries have to make it more attractive to hold domestic currency, and that means temporarily raising interest rates, even if this (hurts) weak banks and corporations. From 1985 to 1996, Thailand's economy grew at an average of over 9% per year,
6510-505: A victory of similar margins, suspected that the election had been fixed. The Team B candidate for Deputy President, Musa Hitam, had also been defeated by Ghafar Baba of Team A, while two of the three vice-presidents were Team A candidates. The Supreme Council comprised 16 Team A candidates and 9 Team B candidates. Allegations were made that several delegates who had voted were drawn from UMNO branches not properly registered. There were also several unproved allegations being bandied about that
6696-545: Is a nationalist right-wing political party in Malaysia . As the oldest (but non-continuous) national political party within Malaysia (since its inception in 1946), UMNO has been known as Malaysia's "Grand Old Party". UMNO is a founding and the principal dominant member of the Barisan Nasional (BN) coalition, which taken along with its predecessor Alliance , had been the main governing party of Malaysia from
6882-440: Is revered in developing and Islamic nations for Malaysia's economic progress and support of liberal Muslim values . He also champions Malay nationalism , although he has evolved from supporting " Ketuanan Melayu " to advocating a " Bangsa Malaysia " that assimilates non-Malays into Malay culture , strictly rejecting multiculturalism . He criticizes neoliberalism and Western influence , controversially suggesting that
7068-644: The 1990 election . Semangat 46 failed to make any headway outside Razaleigh's home state of Kelantan. The expiry of the Malaysian New Economic Policy (NEP) in 1990 allowed Mahathir to outline his economic vision for Malaysia. In 1991, he announced Vision 2020 , under which Malaysia would aim to become a fully developed country within 30 years. The target would require average economic growth of approximately seven per cent of gross domestic product per annum. One of Vision 2020's features would be to gradually break down ethnic barriers. Vision 2020
7254-515: The 1MDB corruption scandal in 2016, joining BERSATU and leading the Pakatan Harapan opposition coalition to victory in the 2018 general election . During his second tenure , he pledged to investigate the 1MDB scandal, combat corruption, and cut spending on large infrastructure projects. He also secured the pardon and release of Anwar Ibrahim . Mahathir resigned in 2020 amidst a political crisis . Despite losing his parliamentary seat in
7440-460: The 2022 general election , he remained active in politics and shifted party affiliation several times. Mahathir's political views have shifted throughout his life, and are shaped by his Malay nationalism and Islamic religious beliefs . Initially, he was aligned with Third-Worldism in the 1980s and later advocated for " Asian values " and globalization . He has consistently maintained Islamic political views throughout his political career. He
7626-650: The Abdul Razak government , returning to UMNO's Supreme Council in 1973. He was appointed to Cabinet in 1974 as the Minister for Education . He returned to the House of Representatives in the 1974 election , winning the Kedah-based seat of Kubang Pasu unopposed. One of his first acts as Minister for Education was to introduce greater government control over Malaysia's universities , despite strong opposition from
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7812-484: The Asian financial crisis . The 1997 Southeast Asian haze , the worst haze event in history caused by Indonesian forest fires , was a major air pollution crisis for the country; Mahathir launched a cross-border firefighting operation in response. In 1997, the Asian financial crisis threatened to devastate Malaysia's economy. The value of the ringgit plummeted due to currency speculation, foreign investment fled, and
7998-686: The British grouped the Malay states and the Straits Settlements into the Malayan Union , and granted citizenship to non-Malays. This caused major backlash from Malays and a wave of Malay nationalism swept across the country. Mahathir became politically activated by these changes, joining protests and activism against the new citizenship policies. Mahathir later argued for affirmative action for Malays at medical college. While at college, he contributed to The Straits Times under
8184-583: The Constitution . Independence was declared by the Tunku in Merdeka Stadium on 31 August 1957, marking a transition into a new era of Malayan and Malaysian politics. In Malaya's first general elections in 1959, the Alliance coalition led by UMNO won 51.8% of the votes and captured 74 out of 104 seats, enough for a two-thirds majority in parliament , which would not only allow them to form
8370-651: The Independence of Malaya Party . Tunku Abdul Rahman replaced Dato' Onn as UMNO President. In the following year, the Kuala Lumpur branch of UMNO formed an ad hoc and temporary electoral pact with the Selangor branch of Malayan Chinese Association to avoid contesting the same seats in the Kuala Lumpur municipal council elections. UMNO and MCA eventually carried nine out of the twelve seats, dealing
8556-471: The Internal Security Act . This included journalist Samad Ismail and Abdullah Ahmad , who was a former deputy minister in the former government but was suspected of being an underground communist . He appointed Musa Hitam as deputy prime minister. Mahathir exercised caution in his first two years in power, consolidating UMNO's leadership and, with victory in the 1982 general election ,
8742-533: The Jakarta Stock Exchange touched a historic low in September. Moody's eventually downgraded Indonesia's long-term debt to " junk bond ". Although the rupiah crisis began in July and August 1997, it intensified in November when the effects of that summer devaluation showed up on corporate balance sheets. Companies that had borrowed in dollars had to face the higher costs imposed upon them by
8928-636: The Kadazan people was discontinued in favour of the Malay language. The USNO Chief Minister, Mustapha Harun , was also known for favouring political patronage as a means of allocating valuable timber contracts, and living an extravagant lifestyle, being ferried to his A$ 1 million Queensland home by jets provided with Sabahan public funds. On 24 April 1987, UMNO held its Annual General Assembly and triennial Party election. The then Prime Minister and party President, Mahathir Mohamad , faced his first party election in 12 years, having been elected unopposed since
9114-615: The Latin American debt crisis . The effects of the SAPs were mixed and their impact controversial. Critics, however, noted the contractionary nature of these policies, arguing that in a recession , the traditional Keynesian response was to increase government spending, prop up major companies, and lower interest rates. The reasoning was that by stimulating the economy and staving off recession , governments could restore confidence while preventing economic loss . They pointed out that
9300-693: The Malayan Emergency had been on-going. The Malayan National Liberation Army (MNLA), the armed wing of the Malayan Communist Party (MCP), committed sabotage campaigns against the British by disrupting transportation and communication networks, attacking police stations, burning down factories, with the goal of gaining independence for Malaya by making British rule in Malaya too expensive to maintain. The colonial government declared
9486-539: The Malayan Union in the 1940s to forming the Gerakan Tanah Air coalition in 2022. He was granted the soubriquet "Father of Modernisation" (" Bapa Pemodenan ") for his pivotal role in transforming the country's economy and infrastructure. At the age of 99, he is currently the oldest living former Malaysian prime minister. Born and raised in Alor Setar , Kedah, Mahathir excelled in his studies and pursued
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#17327655017149672-479: The National Justice Party ( Keadilan ) to contest in the 1999 election . UMNO lost 18 seats and two state governments as large numbers of Malays voted for PAS or Keadilan in protest of Anwar's treatment. In September 2001, debate aroused after Mahathir announced that Malaysia was already an Islamic state ; this caused uneasiness among non-Muslims in Malaysia, whilst the opposition DAP launched
9858-553: The Speaker of the Dewan Rakyat , but Tunku was not properly considered an incumbent then, being only a care-taker president. The 1987 contest was a vastly different matter. Mahathir was opposed by his very popular former Finance Minister, Tengku Razaleigh Hamzah . The press took to referring to Mahathir and his supporters as Team A, and Razaleigh's camp as Team B. Team B included then Deputy Prime Minister Tun Musa Hitam , who
10044-642: The US government was involved in the 9/11 attacks and a group of international elites control every aspects of life with the aim of establishing global hegemony . He has also been accused of antisemitism for his comments , which include stereotypes about Jews' financial skills and media control . On environmental issues, he criticizes the Global North countries for " eco-imperialism " and defends Malaysia's palm oil industry as sustainable, despite international scrutiny linking it to deforestation . Mahathir
10230-635: The West . As prime minister, he was an advocate of Asian values and development models , and was particularly prominent across the Muslim world . In 2002, Mahathir announced his intention to resign as Prime Minister, officially stepping down in 2003 after 22 years in office, but remained politically influential and was critical of his successors. Mahathir also served as the Chancellor of Universiti Teknologi Petronas (UTP) from 2004 to 2016. He quit UMNO over
10416-454: The cabinet reshuffle that promoted Hussein Onn, Mahathir was given the key post of Minister for Education. The Tun Razak government announced the New Economic Policy in 1971. Its stated goal was to "eventually eradicate poverty... irrespective of race" through a "rapidly expanding economy" which emphasised to increase the Malays' share in the national economy to a reasonable portion between all
10602-428: The exchange market was flooded with the currencies of the crisis countries, putting depreciative pressure on their exchange rates. To prevent currency values collapsing, these countries' governments raised domestic interest rates to exceedingly high levels (to help diminish flight of capital by making lending more attractive to investors) and intervened in the exchange market, buying up any excess domestic currency at
10788-455: The fixed exchange rate with foreign reserves . Neither of these policy responses could be sustained for long, as several countries had insufficient levels of foreign exchange reserves. Very high interest rates, which can be extremely damaging to a healthy economy, wreaked further havoc on economies in an already fragile state, while the central banks were hemorrhaging foreign reserves, of which they had finite amounts. When it became clear that
10974-567: The independence of Malaya in 1957 until its defeat in the 2018 general election . From 1957 to 2018, every Prime Minister of Malaysia was also the President of UMNO . It has since returned to power twice as a result of the 2020-2022 Malaysian political crisis , firstly as a partner in a Perikatan Nasional -led government and subsequently as the leading party in a BN-led government with UMNO vice-president Ismail Sabri serving as Prime Minister. A race-focused party, UMNO's goals are to uphold
11160-472: The " structural adjustment package" (SAP). The SAPs called on crisis-struck nations to reduce government spending and deficits, allow insolvent banks and financial institutions to fail, and aggressively raise interest rates. The reasoning was that these steps would restore confidence in the nations' fiscal solvency , penalize insolvent companies, and protect currency values. Above all, it was stipulated that IMF-funded capital had to be administered rationally in
11346-432: The "General Agreement to Borrow" and the "Emergency Finance Mechanism". The scope and the severity of the collapses led to an urgent need for outside intervention. Since the countries melting down were among the richest in their region, and in the world, and since hundreds of billions of dollars were at stake, any response to the crisis was likely to be cooperative and international. The International Monetary Fund created
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#173276550171411532-613: The 1970s, responded to the resurgence by taking an increasingly strident Islamist stand under the leadership of Yusof Rawa . Mahathir tried to appeal to religious voters by establishing Islamic institutions such as the International Islamic University of Malaysia which could promote Islamic education under government oversight. He managed to draw Anwar Ibrahim , the leader of the Malaysian Islamic Youth Movement (ABIM), into
11718-629: The 1974 Baling demonstrations. The demonstrations resulted in the arrest of over 1,000 students, including Anwar Ibrahim who wasdetained under the Internal Security Act . In 1975, parliament passed amendments to the Universities and University Colleges Act which banned students from expressing support of or holding positions in any political party or trade union without written consent from the university's Vice-Chancellor. The act also banned political demonstrations from being held on university campuses. In 1976, however, mass demonstrations were held at
11904-478: The 1975 UMNO election. The politics of the Malays, particularly UMNO politics, had undergone a sea change in the first few years of the Mahathir stewardship, and the party presidency was challenged for the second time in 41 years. The first challenge was a dull affair in which Hussein Onn was opposed by a minor party official named Sulaiman Palestin. In fact, in the early 1950s, Tunku Abdul Rahman 's presidency had also been challenged by C. M. Yusof , who later became
12090-472: The 1990s after the implementation of a number of export-oriented reforms. Other economists dispute China's impact, noting that both ASEAN and China experienced simultaneous rapid export growth in the early 1990s. Many economists believe that the Asian crisis was created not by market psychology or technology, but by policies that distorted incentives within the lender–borrower relationship. The resulting large quantities of credit that became available generated
12276-514: The 1990s went to Anwar Ibrahim, appointed by Mahathir as finance minister in 1991. The government rode the economic wave and won the 1995 election with an increased majority. Mahathir initiated a series of major infrastructure projects in the 1990s. One of the largest was the Multimedia Super Corridor , a new information technology district south of Kuala Lumpur modelled after Silicon Valley . Other Mahathir projects included
12462-504: The 1990s, Mahathir found himself at odds with Malaysian royalty over conflicting economic interests. In response to conflicts between Malaysian royals and prospective business leaders, Mahathir's government passed a resolution on royal activities. In the 1992 Gomez Incident , Sultan Iskandar's son, a representative field hockey player, was suspended from competition for five years for assaulting an opponent. Iskandar retaliated by pulling all Johor hockey teams out of national competitions. When
12648-498: The 1990s, hot money flew into the Southeast Asia region through financial hubs , especially Hong Kong. The investors were often ignorant of the actual fundamentals or risk profiles of the respective economies, and once the crisis gripped the region, the political uncertainty regarding the future of Hong Kong as an Asian financial centre led some investors to withdraw from Asia altogether. This shrink in investments only worsened
12834-519: The 84 seats it contested, leaving PAS with just one Member of Parliament (MP). In 1987, Tengku Razaleigh Hamzah , who had been demoted from Finance Minister to Trade and Industry Minister , challenged Mahathir for UMNO's presidency , and effectively the prime ministership. Razaleigh's bid was supported by Musa, who had resigned as deputy prime minister the previous year. While once close allies with Mahathir, both fell out with Musa claiming that Mahathir no longer trusted him. Razaleigh and Musa ran for
13020-772: The Alliance to allow it to contest elections there. In the 1963 Singapore state elections , the Alliance decided to challenge Lee Kuan Yew 's governing People's Action Party through the Singapore Alliance Party . UMNO politicians actively campaigned in Singapore for the Singapore Alliance, contending that the Singapore Malays were being treated as second-class citizens under the Chinese-dominated PAP government. All of
13206-558: The Barisan Nasional. Team B was also perceived as less Islamist than Mahathir's faction. Mahathir claimed that the charges against him were groundless, and suggested that his opponents were fracturing Malay unity and were only motivated by greed. Eventually, Mahathir was returned to office. However, he was elected with such a small majority of 43 (761 against 718 votes) that questions were immediately raised about his mandate. Team B supporters, many of whom had been anticipating
13392-718: The Chief Minister of a state. They thought he was acting as if he were the Prime Minister of a sovereign nation. Finance Minister Tan Siew Sin of the MCA labelled Lee as the "greatest, disruptive force in the entire history of Malaysia and Malaya." Lee now seemed determined to press forward politically and continue contesting elections nationwide, with the formation of the Malaysian Solidarity Council —a coalition of political parties which called for
13578-548: The Communist emergency, and reforming the civil service through the hiring of more Malayans as opposed to foreigners. When the results were released, it emerged that the Alliance had won 51 of the 52 seats contested, with the other seat going to PAS (the Pan-Malayan Islamic Party, a group of Islamists that split from UMNO). The Tunku became the first Chief Minister of Malaya. Throughout this period,
13764-589: The English student newspaper and winning a series of language awards, he won a position in a selective English-medium secondary school Government English School in 1933. With schools closed during the Japanese occupation of Malaya in World War II , he started a small business, selling coffee and snacks such as pisang goreng (banana fritters). After the war, Mahathir graduated from secondary school with
13950-406: The IMF – Malaysia recovered from the crisis faster than its Southeast Asian neighbours. In the domestic sphere , it was a political triumph. Amidst the economic events of 1998, Mahathir had dismissed Anwar as finance minister and deputy prime minister, taking credit for the economy's recovery despite Anwar's policies. Anwar led the reformasi movement against Mahathir's government in response. In
14136-557: The IMF, the reserves of Thailand and South Korea were perilously low, and the Indonesian Rupiah was excessively depreciated. Thus, the first order of business was... to restore confidence in the currency. To achieve this, countries have to make it more attractive to hold domestic currency, which in turn, requires increasing interest rates temporarily, even if higher interest costs complicate the situation of weak banks and corporations... Why not operate with lower interest rates and
14322-540: The Internal Security Act. Mahathir argued that the detentions were necessary to prevent a repeat of the 1969 race riots. Most of the detainees were prominent opposition activists, including the DAP leader, Lim Kit Siang , and nine of his fellow MPs. Three newspapers sympathetic to the opposition were shut down. Mahathir suffered a heart attack in early 1989. He recovered to lead Barisan Nasional to victory in
14508-707: The MARA Institute of Technology, protesting the UUCA. Mahathir then threatened to revoke the scholarships of the students, most of whom relied on public support to pay their way through university. BN was also challenged in Sarawak after the 1974 election, which saw the Sarawak National Party led by James Wong become tied with the DAP as the largest opposition party in Parliament, both of them holding nine seats each. SNAP had campaigned against BN on
14694-757: The MCA for Gerakan. This contributed to internal strife, as the MCA was no longer the sole representative of Chinese interests in the National Front. Discontent among student organisations in Malaysian universities soon posed a new problem for the UMNO-led government. However, Mahathir in his capacity as Minister for Education issued a stern warning to university students and faculty not to become involved in politics. However, after stories that children of rubber tappers had died after consuming poisonous wild yam due to poverty, university students reacted by staging
14880-415: The MCA, thus straining relations between the two parties. However, the Alliance was dealt an even larger blow on the state level, losing control of Kelantan , Perak , and Penang . A major riot broke out in the aftermath of the election on 13 May 1969. The Yang di-Pertuan Agong (King) declared a national emergency after being advised by the national government to do so. Parliament was suspended, with
15066-572: The MCP Secretary-General, insisted that the MCP be allowed to contest elections and be declared a legal political party as a pre-condition to laying down arms. However, the Tunku rejected this, leading to an impasse. In 1956, the Tunku led a group of negotiators, comprising Alliance politicians and representatives of the Malay rulers, to London. There, they brokered a deal with the British government for independence. The date of independence
15252-450: The MCP, along with several left-wing political groups, illegal in 1948. In 1955, the Alliance government together with the British High Commissioner declared an amnesty for the communist insurgents who surrendered. Representatives from the Alliance government also met with leaders of the MCP in an attempt to resolve the conflict peacefully, as their manifesto in the election stated. Chin Peng ,
15438-465: The Malayan Union had been replaced by the semi-autonomous Federation of Malaya, UMNO shifted its focus to politics and governance. According to at least one official school textbook published during UMNO's time in government, the party fought for other races once they were at the helm of the country. In 1951, Onn Jaafar left UMNO after failing to open its membership to non-Malay Malayans to form
15624-442: The Malays are the definitive people of Malaysia, and thus deserved special rights as the sovereign people of the nation. It also controversially argued that the Malays needed affirmative action to overcome deficiencies in their genetic stock. Hussein Onn, son of UMNO founder Dato' Onn Ja'afar, soon became a rising star in UMNO. After Ismail died suddenly of a heart attack in 1973, Hussein Onn succeeded him as Deputy Prime Minister. In
15810-565: The People's Party ( Parti Rakyat Brunei ) which objected to the formation of Malaysia, and the Sultan of Brunei Omar Ali Saifuddien III 's demand that he be recognised as the most senior Malay ruler—a demand that was rejected. The Philippines and Indonesia strenuously objected to this development, with Indonesia claiming Malaysia represented a form of neocolonialism and the Philippines claiming Sabah as its territory . The United Nations sent
15996-540: The Tunku and the Malay rulers had asked the Reid Commission to ensure that " in an independent Malaya all nationals should be accorded equal rights, privileges and opportunities and there must not be discrimination on grounds of race and creed ," the Malay privileges, which many in UMNO backed, were cited as necessary by the Reid Commission as a form of affirmative action that would eventually be phased out. These measures were included as Articles 3, 152 and 153 of
16182-440: The Tunku in 1970, he began asserting UMNO's leadership in the Alliance more strongly. When the Tunku led the coalition, he had always consulted Alliance leaders regarding policy—if an Alliance leader objected, the policy was not passed. Under Tun Razak, UMNO was the base of the Alliance and thus the government. The NOC which he led until Parliament reconvened consisted of 7 Malays, one Chinese and one Indian. In Tun Razak's cabinet,
16368-471: The U.S. government had pursued expansionary policies, such as lowering interest rates, increasing government spending, and cutting taxes, when the United States itself entered a recession in 2001, and arguably the same in the fiscal and monetary policies during the 2008–2009 Global Financial Crisis. Many commentators in retrospect criticized the IMF for encouraging the developing economies of Asia down
16554-403: The UMNO presidency and deputy presidency on a joint ticket against Mahathir and his new choice for deputy Abdul Ghafar Baba . Mahathir's Team A enjoyed the press's support, most party heavyweights, and even Iskandar, now the Agong. However, other prominent figures such as Abdullah Ahmad Badawi supported Team B. In the election, held on 24 April 1987, Team A prevailed. Mahathir was re-elected by
16740-588: The UMNO-backed Malay candidates lost to PAP candidates. UMNO Secretary-General Syed Jaafar Albar travelled to Singapore to address the Malay populace. At one rally, he called the PAP Malay politicians un-Islamic and traitors to the Malay race, greatly straining PAP-UMNO relations . The PAP politicians, who saw this as a betrayal of an earlier agreement with the Alliance not to contest elections in Malaysia and Singapore respectively, decided on running on
16926-595: The USD–Baht currency peg, and the Thai government was eventually forced to float the Baht, on 2 July 1997, allowing the value of the Baht to be set by the currency market. This caused a chain reaction of events, eventually culminating into a region-wide crisis. Thailand's booming economy came to a halt amid massive layoffs in finance, real estate, and construction that resulted in huge numbers of workers returning to their villages in
17112-474: The United States a more attractive investment destination relative to Southeast Asia, which had been attracting hot money flows through high short-term interest rates, and raised the value of the U.S. dollar. For the Southeast Asian nations which had currencies pegged to the U.S. dollar, the higher U.S. dollar caused their own exports to become more expensive and less competitive in the global markets. At
17298-401: The academic community. He moved to limit politics on university campuses, giving his ministry the power to discipline students and academics who were politically active and making scholarships for students conditional on the avoidance of politics. In 1975, Mahathir ran for one of the three vice-presidencies of UMNO. The contest was regarded as a struggle for the party's leadership succession, as
17484-583: The affected countries were at the EMEAP (Executive Meeting of East Asia Pacific) meeting in Shanghai, and they failed to make the "New Arrangement to Borrow" operational. A year earlier, the finance ministers of these same countries had attended the 3rd APEC finance ministers meeting in Kyoto , Japan, on 17 March 1996, and according to that joint declaration, they had been unable to double the amounts available under
17670-411: The aspirations of Malay nationalism , the racial concept of Ketuanan Melayu (lit. Malay Supremacy), the dignity of the Malay race, the religion of Islam, as well as of the country itself. The party also aspires to protect Malay culture as the national culture and to uphold, defend and expand Islam across Malaysia. In the 2018 UMNO leadership election , which was considered by many as crucial to
17856-459: The balloting process had not been above board. Nevertheless, Razaleigh pledged to support Mahathir, provided that a "witch hunt" was not launched. However, Mahathir promptly purged the government cabinet of all Team B members, and launched similar reshuffles in state and local governments. 1997 Asian financial crisis The 1997 Asian financial crisis was a period of financial crisis that gripped much of East and Southeast Asia during
18042-403: The cabinet paid tribute to Mahathir for his invaluable service to the nation as Prime Minister for the last 22 years. He also received a record-breaking outpouring of public gratitude, marked by a 5.5 km-long banner displaying messages from over 50,000 Malaysians. Having spent over 22 years in office, Mahathir was the world's longest-serving elected leader when he retired. For his contributions to
18228-482: The car manufacturer Proton as a joint venture between the Malaysian government and Mitsubishi . By the end of the 1980s, with the support of protective tariffs , Proton became a profitable enterprise and the largest carmaker in Southeast Asia . In Mahathir's early years as prime minister, Malaysia experienced a resurgence of Islam and conservatism among Malays. PAS, which had joined UMNO in government in
18414-401: The chain objectives of tightened money supply , discouraged currency speculation , stabilized exchange rate, curbed currency depreciation, and ultimately contained inflation . In the Asian meltdown, highest IMF officials rationalized their prescribed high interest rates as follows: From then IMF First Deputy managing director, Stanley Fischer in 1998: When their governments "approached
18600-591: The countries most affected by the crisis. Hong Kong , Laos , Malaysia and the Philippines were also hurt by the slump. Brunei , mainland China , Japan , Singapore , Taiwan , and Vietnam were less affected, although all suffered from a general loss of demand and confidence throughout the region. Although most of the governments of Asia had seemingly sound fiscal policies , the International Monetary Fund (IMF) stepped in to initiate
18786-477: The country to balance its budget and repay its debts to the IMF in 2003, four years ahead of schedule. The Thai baht continued to appreciate to 29 Baht to the U.S. dollar in October 2010. In June 1997, Indonesia seemed far from crisis. Unlike Thailand, Indonesia had low inflation, a trade surplus of more than $ 900 million, huge foreign exchange reserves of more than $ 20 billion, and a good banking sector. However,
18972-624: The country, many factors arising from all aspects, including sports broadcasting on Indonesian television, including: Additionally, the Indonesian motorcycle Grand Prix , which was held at Sentul , was dropped from the 1998 Superbike and MotoGP calendars. World Rally Championship also dropped the Rally Indonesia from their 1998 calendar . The banking sector was burdened with non-performing loans as its large corporations were funding aggressive expansions. During that time, there
19158-858: The countryside and 600,000 foreign workers being sent back to their home countries. The baht devalued swiftly and lost more than half of its value. The baht reached its lowest point of 56 units to the U.S. dollar in January 1998. The Thai stock market dropped 75%. Finance One, the largest Thai finance company until then, collapsed. On 11 August 1997, the IMF unveiled a rescue package for Thailand with more than $ 17 billion, subject to conditions such as passing laws relating to bankruptcy (reorganizing and restructuring) procedures and establishing strong regulation frameworks for banks and other financial institutions. The IMF approved on 20 August 1997, another bailout package of $ 2.9 billion. Poverty and inequality increased while employment, wages and social welfare all declined as
19344-426: The debacle are many and disputed. Thailand's economy developed into an economic bubble fueled by hot money . More and more was required as the size of the bubble grew. The same type of situation happened in Malaysia and Indonesia, which had the added complication of what was called " crony capitalism ". The short-term capital flow was expensive and often highly conditioned for quick profit . Development money went in
19530-432: The development and progress of Malaysia, Mahathir was honored by his successor, Abdullah Badawi, with the title Bapa Pemodenan Malaysia (Father of Malaysia's Modernisation) after stepping down from office. United Malays National Organisation [REDACTED] [REDACTED] Race and politics The United Malays National Organisation ( UMNO ), officially Pertubuhan Kebangsaan Melayu Bersatu ( PEKEMBAR ),
19716-523: The development of Putrajaya as the home of Malaysia's public service and bringing a Formula One Grand Prix to Sepang . One of the most controversial developments was the Bakun Dam in Sarawak. The ambitious hydro-electric project was intended to carry electricity across the South China Sea to satisfy electricity demand in peninsular Malaysia. Work on the dam was eventually suspended due to
19902-405: The early 1980s. Mahathir believed this would provide economic opportunities for bumiputera and their businesses. His government privatised airlines , utilities and telecommunication firms , accelerating to a rate of about 50 privatisations a year by the mid-1990s. While privatisation generally improved the working conditions of Malaysians in privatised industries and raised significant revenue for
20088-636: The economic environment. The devaluation of the Chinese renminbi and the Japanese yen , subsequent to the latter's strengthening due to the Plaza Accord of 1985, the raising of U.S. interest rates which led to a strong U.S. dollar, and the sharp decline in semiconductor prices, all adversely affected their growth. As the U.S. economy recovered from a recession in the early 1990s, the U.S. Federal Reserve Bank under Alan Greenspan began to raise U.S. interest rates to head off inflation . This made
20274-526: The election, wrote a letter to the Tunku criticising his leadership. Mahathir organised a campaign with University of Malaya lecturer Raja Muktaruddin Daim , circulating his letter among the student bodies of local universities. Mass demonstrations broke out calling for "Malay sovereignty" and the Tunku's ousting. After the riot, Home Affairs Minister Ismail Abdul Rahman and Tun Razak agreed to expel Mahathir and former Executive Secretary of UMNO Musa Hitam from
20460-458: The expulsion of Singapore. Tunku opened his speech in Parliament with the words, "In all the 10 years of my leadership of this House I have never had a duty so unpleasant as this to perform. The announcement which I am making concerns the separation of Singapore from the rest of the Federation." On that day, Lee Kuan Yew announced that Singapore was a sovereign independent nation and assumed
20646-547: The financial collapse of the Thai baht after the Thai government was forced to float the baht due to lack of foreign currency to support its currency peg to the U.S. dollar . Capital flight ensued almost immediately, beginning an international chain reaction. At the time, Thailand had acquired a burden of foreign debt . As the crisis spread, other Southeast Asian countries and later Japan and South Korea saw slumping currencies, devalued stock markets and other asset prices, and
20832-454: The financial conditions in Asia (subsequently leading to the depreciation of the Thai baht on 2 July 1997). Several case studies on the topic of the application of network analysis of a financial system help to explain the interconnectivity of financial markets , as well as the significance of the robustness of hubs (or main nodes). Any negative externalities in the hubs creates
21018-451: The fold of the Alliance. Gerakan, PPP, PAS, and several former opposition parties in East Malaysia joined the coalition, which was renamed as Barisan Nasional . Barisan was formally registered as an organisation in 1974, the same year in which a general election was held. There had been much internal conflict in the National Front regarding the election; in 1973, Lim Keng Yaik and several supporters of his aggressive pro-Chinese stance left
21204-555: The fourth and seventh Prime Minister of Malaysia from 1981 to 2003 and from 2018 to 2020. With a cumulative tenure of 24 years, making him the longest-serving prime minister in Malaysian history. Before becoming premier, he served as Deputy Prime Minister and in other cabinet positions. He was a Member of Parliament for Langkawi from 2018 to 2022, Kubang Pasu from 1974 to 2004, and Kota Star Selatan from 1964 to 1969. His political career spanned more than 78 years, from joining protests opposing citizenship policies for non-Malays in
21390-497: The future, with no favored parties receiving funds by preference. In at least one of the affected countries the restrictions on foreign ownership were greatly reduced. There were to be adequate government controls set up to supervise all financial activities, ones that were to be independent, in theory, of private interest. Insolvent institutions had to be closed, and insolvency itself had to be clearly defined. In addition, financial systems were to become "transparent", that is, provide
21576-400: The government again but amend the constitution at will. However, for the Alliance, the election was marred by internal strife when MCA leader Lim Chong Eu demanded his party be allowed to contest 40 of the 104 seats available. When the Tunku rejected this, many of Lim's supporters resigned, and ran in the election as independents, which cost the Alliance some seats. In 1961, the Tunku mooted
21762-500: The government to selective Bumiputras . The old civil service hiring quota of 4 Malays for every non-Malay's was effectively disregarded in practice; between 1969 and 1973, 98% of all new government employees were Malay. Five new universities were opened under the NEP, two of which were targeted to focus on the poor Malays and Muslim citizens. Tun Razak also began shoring up the government by bringing in several former opposition parties into
21948-439: The government, also sending an open dissenting letter to Tunku for failing to uphold Malay interests and calling for his resignation. By the end of the year, Mahathir was fired from UMNO's Supreme Council and expelled from the party. Tunku had to be persuaded not to have him arrested. Expelled from UMNO, Mahathir wrote his first book, The Malay Dilemma , in which he set out his vision for the Malay community. The book argued that
22134-482: The government, many privatisations occurred in the absence of open tendering processes and benefited Malays who supported UMNO. One of the most notable infrastructure projects at the time was the construction of the North–South Expressway , a motorway running from the Thai border to Singapore. The contract to construct the expressway was awarded to a business venture of UMNO. Mahathir oversaw the establishment of
22320-497: The government. In 1983, Mahathir undertook one of the first challenges he had with Malaysia's royalty . The position of Yang di-Pertuan Agong , the Malaysian head of state, was due to rotate into either the elderly Idris Shah II of Perak or the controversial Iskandar of Johor , who had only a few years earlier been convicted of manslaughter. Mahathir had grave reservations about the two Sultans, who were both activist rulers of their own states. Mahathir tried to pre-emptively limit
22506-605: The health of Abdul Razak and his deputy, Hussein Onn , waned. Each of Abdul Razak's preferred candidates was elected: former Chief Minister of Melaka, Ghafar Baba ; Tengku Razaleigh Hamzah , a wealthy businessman and member of Kelantan 's royal family; and Mahathir. When Razak died the following year, Hussein, as his successor, had to choose between the three men, alongside the Minister of Home Affairs Ghazali Shafie , to be deputy prime minister. Mahathir's rivals had significant political liabilities: Ghazali, having been defeated by
22692-404: The highest economic growth rate of any country at the time. Inflation was kept reasonably low within a range of 3.4–5.7%. The baht was pegged at 25 to the U.S. dollar. On 14 and 15 May 1997, the Thai baht was hit by massive speculative attacks. On 30 June 1997, Prime Minister Chavalit Yongchaiyudh said that he would not devalue the baht. However, Thailand lacked the foreign reserves to support
22878-533: The highest rank and enrolled to study medicine at the King Edward VII College of Medicine in Singapore . Mahathir studied medicine at what was then called University of Malaya, later renamed University of Singapore . When the university granted him an honorary degree in November 2018, he said "I will always value my stay in Singapore for nearly six years." Mahathir married Hasmah in 1956,
23064-471: The idea of forming a federation named "Malaysia", which would consist of the British colonies of Singapore , Sabah , Sarawak , and also the British Protectorate of Brunei . The reasoning behind this was that this would allow the federal government to control and combat communist activities, especially in Singapore. It was also feared that if Singapore achieved independence, it would become
23250-467: The international financial community. Later that year, in July, South Korea's third-largest car maker, Kia Motors , asked for emergency loans. The domino effect of collapsing large South Korean companies drove the interest rates up and international investors away. In the wake of the Asian market downturn, Moody's lowered the credit rating of South Korea from A1 to A3, on 28 November 1997, and downgraded again to B2 on 11 December. That contributed to
23436-536: The journey of the UMNO party was the result of a combination of 41 Malay associations in the Malay Peninsula at that time led by Ahmad Boestamam who presented a memorandum to Sultan Ismail Ibni Sultan Ibrahim who became the Sultan Johor at that time to reject the Malayan Union proposal brought by the British. In the second phase, a series of Malay congresses were held, culminating in the formation of
23622-499: The kind of financial information used in the West to make financial decisions. As countries fell into crisis, many local businesses and governments that had taken out loans in US dollars, which suddenly became much more expensive relative to the local currency which formed their earned income, found themselves unable to pay their creditors. The dynamics of the situation were similar to that of
23808-534: The late 1990s. The crisis began in Thailand in July 1997 before spreading to several other countries with a ripple effect, raising fears of a worldwide economic meltdown due to financial contagion . However, the recovery in 1998–1999 was rapid, and worries of a meltdown quickly subsided. Originating in Thailand, where it was known as the Tom Yum Kung crisis ( Thai : วิกฤตต้มยำกุ้ง ) on 2 July, it followed
23994-750: The loss of his seat to ethnic Chinese voters switching support from UMNO to PAS. Being a Malay-dominated seat, only the two major Malay parties fielded candidates, leaving Chinese voters to choose between the Malay-centric UMNO and the Islamist PAS. Large government losses in the election were followed by the race riots of 13 May 1969 . Hundreds of people were killed in clashes between Malays and Chinese. In 1968, Mahathir had expressed concern over escalating racial tensions in two newspaper articles, and feared preventative measures would be needed to avoid violence. Outside parliament, he openly criticised
24180-423: The main stock exchange index fell by over 75 per cent. At the urging of the International Monetary Fund (IMF), the government cut government spending. It raised interest rates, which only served to exacerbate the economic situation. In 1998, Mahathir went against the advice of IMF and Anwar by increasing government spending and fixing the ringgit to the US dollar. The result confounded his international critics and
24366-453: The mainland in the 1964 general election . Although the PAP contested nine Parliamentary seats and attracted large crowds at its rallies, it won only one seat. The strain in race relations caused by the communal lines along which the political factions had been drawn led to the 1964 Race Riots in Singapore. Alliance leaders also were alarmed at Lee's behaviour, which they considered unseemly for
24552-534: The media speculated that it related to lurid allegations of sexual misconduct circulated in a "poison pen letter" at the general assembly. As more allegations surfaced, large public rallies were held in support of Anwar. On 20 September, he was arrested and placed in detention under the Internal Security Act. Anwar stood trial on four charges of corruption, arising from allegations that Anwar abused his power by ordering police to intimidate persons who had alleged Anwar had sodomised them. Before Anwar's trial, Mahathir told
24738-470: The mid-1990s, Mahathir had become the country's "uncrowned king". His policies during his first premiership were later described as " authoritarian " by the BBC . According to biographer Ian Stewart, by the mid-1990s Anwar's leadership ambition was the most serious threat to Mahathir's power. Anwar began to distance himself from Mahathir, overtly promoting his superior religious credentials and suggesting loosening
24924-591: The ministry promoting Malaysia through overseas visits. However, Mahathir did not have much influence as deputy prime minister. Hussein was a cautious leader who rejected many of Mahathir's bold policy proposals, such as a freeway the length of Peninsular Malaysia and heavy industries cooperation. Hussein remained distant from Mahathir while keeping Ghazali and Razaleigh as his close advisors, who often outmanoeuvred Mahathir to reach Hussein. Nonetheless, when Hussein relinquished power due to ill health in 1981, Mahathir succeeded him unopposed and with his blessing. Mahathir
25110-547: The name UMNO. According to Milne and Mauzy, the episode destroyed the independence of Malaysia's judiciary. At the same time as the political and judicial crises, Mahathir initiated a crackdown on opposition dissidents using the Internal Security Act . Mahathir later declared that it was only used to lock up people accused of riots, unlawful assembly, terrorism and those who have murdered police officers. The appointment of several administrators who did not speak Mandarin to Chinese schools provoked an outcry among Chinese Malaysians to
25296-406: The national economy. In 1976, he advanced to the position of deputy prime minister, and in 1981, he was sworn in as prime minister, embarking on a historic tenure that would span 22 years and transform Malaysia's political and economic landscape. During Mahathir's first tenure, Malaysia underwent modernisation and economic growth when his government initiated widespread industry privatisation and
25482-548: The nationalist party, UMNO on 10 May 1946 at the Third Malay Congress in Johor Bahru , with Datuk Onn Jaafar as its leader. UMNO strongly opposed the Malayan Union, but originally did not seek political power. UMNO had no choice but continue playing a supporting role to the British colonial administration. The British cooperated with UMNO leaders and helped to defeat the communist insurgency. In 1949, after
25668-412: The newly formed Parti Gerakan Rakyat Malaysia or Gerakan, led by Lim Chong Eu, also adopted the DAP's stance. Matters came to a head in the 1969 general election . When polling closed on the mainland peninsula (West Malaysia) on 10 May, it emerged the Alliance had won less than half of the popular vote, although it was assured of 66 out of 104 Parliamentary seats available. Much of the losses came from
25854-432: The others for a vice-presidency, lacked the support of UMNO members. Ghafar had no higher education and was not fluent in English. Razaleigh was young, inexperienced and unmarried. However, Hussein and Mahathir were not close allies, and Hussein knew Mahathir's choice would displease Abdul Razak. After six weeks of indecision, Mahathir was, much to his surprise, appointed as Hussein's deputy. The appointment meant that Mahathir
26040-421: The party for breaching party discipline. The suspended elections in East Malaysia were held in 1970, and restored the Alliance government's two-thirds majority in parliament. On 31 August that year, the Tunku announced the national ideology of Rukunegara and his planned retirement as Prime Minister in favour of Tun Razak. He also stated Parliament would be restored the following year. After Tun Razak succeeded
26226-550: The party's progression, former Deputy Prime Minister Ahmad Zahid Hamidi was elected UMNO president in a three-way contest, defeating former UMNO Youth Chief Khairy Jamaluddin , and UMNO veteran Tengku Razaleigh Hamzah . After the British returned to Malaya in the aftermath of World War II , the Malayan Union was formed. However, the Union was met with much opposition due to its constitutional framework, which allegedly threatened Malay sovereignty over Malaya. The first phase of
26412-523: The party, Mahathir published his book The Malay Dilemma in 1970, a work that explored the socio-political and economic challenges facing the Malay community and drew significant attention for its bold views. After Tunku Abdul Rahman's resignation, Mahathir rejoined UMNO and regained his seat in parliament. His political ascent continued as he was appointed Minister of Education from 1974 to 1978. He subsequently became Minister of Trade and Industry from 1978 to 1981, promoting industrialization to strengthen
26598-443: The path of "fast-track capitalism", meaning liberalization of the financial sector (elimination of restrictions on capital flows), maintenance of high domestic interest rates to attract portfolio investment and bank capital, and pegging of the national currency to the dollar to reassure foreign investors against currency risk. The conventional high-interest-rate economic strategy is normally employed by monetary authorities to attain
26784-692: The point where UMNO's coalition partners the Malaysian Chinese Association and Gerakan joined the Democratic Action Party (DAP) in protesting the appointments. UMNO's Youth wing held a provocative protest that triggered a shooting by a lone Malay gunman. Only Mahathir's interference prevented UMNO from staging a larger protest. Instead, Mahathir ordered what Wain calls "the biggest crackdown on political dissent Malaysia had ever seen". Under Operation Lalang , 119 people were arrested and detained without charge under
26970-410: The power that the new Agong could wield over his government. He introduced to parliament amendments to the Constitution to deem the Agong to assent to any bill that had not been assented within 15 days of passage by Parliament. The proposal removed the power to declare a state of emergency from the Agong and placed it with the prime minister. The Agong at the time, Ahmad Shah of Pahang , agreed with
27156-423: The press revealed examples of the rulers' extravagant wealth, Mahathir resolved to cut financial support to royal households. With the press and the government pitted against them, the sultans capitulated to the government's proposals. Their powers to deny assent to bills were limited by further constitutional amendments passed in 1994. With the status and powers of the Malaysian royalty diminished, Wain writes that by
27342-473: The press that he was convinced of Anwar's guilt. He was found guilty in April 1999 and sentenced to six years in prison. In another trial shortly after, Anwar was sentenced to another nine years in prison on a conviction for sodomy. The sodomy conviction was overturned on appeal after Mahathir left office. Anwar's conviction drew criticism from the international community and led to a loss in domestic support for
27528-497: The prime minister for his comments on the judiciary and called for them to be stopped. Mahathir then suspended Salleh for "gross misbehaviour and conduct", ostensibly because the letter was a breach of protocol. A tribunal set up by Mahathir found Salleh guilty and recommended to the Agong that Salleh be dismissed. Five other judges of the court supported Salleh and were suspended by Mahathir. A newly constituted court dismissed Team B's appeal, allowing Mahathir's faction to continue to use
27714-537: The program, 787 insolvent financial institutions were closed or merged by June 2003. The number of financial institutions in which foreign investors invested has increased rapidly. Examples include New Bridge Capital's takeover of Korea First Bank. The South Korean won , meanwhile, weakened to more than 1,700 per U.S. dollar from around 800, but later managed to recover. However, like the chaebol, South Korea's government did not escape unscathed. Its national debt -to-GDP ratio more than doubled (approximately 13% to 30%) as
27900-477: The proposals in principle, but baulked when he realised that the proposal would deem Sultans to assent to laws passed by state assemblies. Supported by the Sultans, the Agong refused to assent to the constitutional amendments, which had passed both houses of Parliament with comfortable majorities. When the public became aware of the impasse, and the Sultans refused to compromise with the government, Mahathir took to
28086-532: The pseudonym "C.H.E. Det" and a student journal, in which he fiercely promoted Malay rights, such as calling for the restoration of Malay as an official language. While practising as a physician in Alor Setar, Mahathir became active in UMNO. By the time of the first general election for the independent state of Malaya in 1959, he was the chairman of the party in Kedah. Despite his prominence in UMNO, Mahathir
28272-562: The races. The NEP targeted a 30 per cent Malay share of the economy by 1990. The government contended that this would lead to a "just society" (" Masyarakat Adil "), the latter slogan being used to promote acceptance of the policy. Quotas in education and the civil service that the Constitution had explicitly provided for were expanded by the NEP, which also mandated government interference in the private sector. For instance, 30% of all shares in initial public offerings would be disbursed by
28458-415: The ranks of UMNO. In some cases, Mahathir's government employed repression against more extreme exponents of Islamism. Ibrahim Libya , a popular Islamist leader, was killed in a police shoot-out in 1985. Al-Arqam , a religious sect, was banned, and its leader, Ashaari Mohammad , was arrested under the Internal Security Act . Mahathir comprehensively defeated PAS at the polls in 1986 , winning 83 seats of
28644-464: The rate was almost exactly 8,000 to 1 U.S. dollar. Indonesia lost 13.5% of its GDP that year. In February 1998, President Suharto sacked the incumbent Bank Indonesia governor, J. Soedradjad Djiwandono , but this proved insufficient. Amidst widespread rioting in May 1998 , Suharto resigned under public pressure and Vice President B. J. Habibie replaced him. As a result of the financial crisis that hit
28830-543: The release of Wong and the entry of SNAP into BN in 1976. In Sabah, BN controlled the state government through the United Sabah National Organisation (USNO), which strongly backed UMNO's pro-Malay and pro-Islam policies. In 1973, Islam was made the official Sabah state religion (the official religion of Sabah was originally Christianity, as permitted by the agreement signed before the merger), and usage of indigenous languages such as those of
29016-561: The reliance on English in government affairs. In this, it was aided by PAS, the Pan-Malaysian Islamic Party, which backed special rights for the Bumiputra, and the strengthening of Islam's position in public affairs. However, the PAP's Malaysian branch, which had now become Democratic Action Party (DAP), took a very strong stance against this, and continued the expelled PAP's call for a "Malaysian Malaysia". In 1968,
29202-481: The restrictions on civil liberties. However, Mahathir continued to back Anwar as his successor until the collapse of their relationship during the Asian financial crisis , with Mahathir abandoning the tight monetary and fiscal policies urged by the IMF. Anwar refused to bail out Malaysian International Shipping Corp , in which Mahathir's son Mirzan had interests. At the UMNO General Assembly in 1998,
29388-405: The role of asymmetric information in the financial markets that led to a " herd mentality " among investors that magnified a small risk in the real economy. The crisis has thus attracted attention from behavioral economists interested in market psychology . Another possible cause of the sudden risk shock may also be attributable to the handover of Hong Kong sovereignty on 1 July 1997 . During
29574-524: The role of prime minister. After the separation and independence of Singapore in 1965, the Singapore branch of UMNO was renamed the Singapore Malay National Organisation ( Pertubuhan Kebangsaan Melayu Singapura ). After the separation of Singapore from the Federation, the Alliance leaders focused on continuing its policies. One involved the Malay language, which was the official language of Malaysia. UMNO sought to reduce
29760-408: The role of the real economy in the crisis compared to the financial markets. The rapidity with which the crisis happened has prompted Sachs and others to compare it to a classic bank run prompted by a sudden risk shock. Sachs pointed to strict monetary and contractionary fiscal policies implemented by the governments on the advice of the IMF in the wake of the crisis, while Frederic Mishkin points to
29946-464: The ruling coalition. US Secretary of State Madeleine Albright defended Anwar as a "highly respectable leader" who was "entitled to due process and a fair trial" and met with Anwar's wife, Wan Azizah Wan Ismail . At the APEC summit in 1999, Canadian Prime Minister Jean Chrétien refused to meet Mahathir, while his foreign minister also met with Wan Azizah. Wan Azizah had formed a liberal opposition party,
30132-550: The rupiah currency trading band from 8% to 12%. As a result, the rupiah suddenly came under severe attack in August. Therefore, on the 14th of the month, the managed floating exchange regime was replaced by a free-floating exchange rate arrangement. The rupiah dropped further due to the shift. The IMF came forward with a rescue package of $ 23 billion, but the rupiah was sinking further amid fears over corporate debts, massive selling of rupiah, and strong demand for dollars. The rupiah and
30318-458: The rupiah's decline, and many reacted by buying dollars through selling rupiah, undermining the value of the latter further. Before the crisis, the exchange rate between the rupiah and the dollar was roughly 2,600 rupiah to 1 U.S. dollar. The rate plunged to over 11,000 rupiah to 1 U.S. dollar on 9 January 1998, with spot rates over 14,000 during 23–26 January and trading again over 14,000 for about six weeks during June–July 1998. On 31 December 1998,
30504-448: The same time, Southeast Asia's export growth slowed dramatically in the spring of 1996, deteriorating their current account position. Some economists have advanced the growing exports of China as a factor contributing to ASEAN nations' export growth slowdown, though these economists maintain the main cause of their crises was excessive real estate speculation. China had begun to compete effectively with other Asian exporters particularly in
30690-519: The seats be elected, but despite the Tunku flying out to London to negotiate, the British held firm. Elections for the council were held in 1955, and the Alliance, which had now expanded to include the Malayan Indian Congress , issued a manifesto stating its goals of achieving independence by 1959, requiring a minimum of primary school education for all children, protecting the rights of the Malay rulers as constitutional monarchs, ending
30876-463: The shock, but nevertheless suffered serious hits in passing, mainly due to its status as a major financial hub and its geographical proximity to Malaysia and Indonesia. By 1999, however, analysts saw signs that the economies of Asia were beginning to recover. After the crisis, economies in East and Southeast Asia worked together toward financial stability and better financial supervision. The causes of
31062-401: The streets to demonstrate public support for his position in mass rallies. The press took the side of the government. A large minority of Malays, including conservative UMNO politicians, and an even larger proportion of the Chinese community supported the Sultans. After five months, the crisis was resolved, as Mahathir and the Sultans agreed to a compromise. The Agong retained the power to declare
31248-466: The tide of capital fleeing these countries was not to be stopped, the authorities ceased defending their fixed exchange rates and allowed their currencies to float . The resulting depreciated value of those currencies meant that foreign currency-denominated liabilities grew substantially in domestic currency terms, causing more bankruptcies and further deepening the crisis. Other economists, including Joseph Stiglitz and Jeffrey Sachs , have downplayed
31434-402: The two having met in medical college. He returned to Alor Setar in 1957 to establish his practice, Maha Clinic. He was the town's first Malay physician and a successful one. He built a large house, invested in various businesses, and employed a Chinese man to chauffeur him in his Pontiac Catalina (most chauffeurs at the time were Malay). After World War II ended and the Japanese withdrew,
31620-512: The two most powerful men other than him were Ismail Abdul Rahman and Ghazali Shafie , who had declared the Westminster-style Parliamentary system inappropriate for Malaysia. Tun Razak also readmitted to the party "ultras" who had been expelled, like Mahathir and Musa Hitam. Mahathir gained notoriety after his expulsion from UMNO by authoring The Malay Dilemma , a book promptly banned from Malaysia, which posited that
31806-654: Was a dominating political figure, winning five consecutive general elections and fending off rivals for UMNO's leadership. He continued pro- bumiputera policies, and oversaw Malaysia's relatively fast recovery from the 1997 Asian financial crisis . Critics argue that he centralized power by undermining judicial independence and supported a constitutional amendment to remove legal immunity for royalty . In 1987, he detained various activists and religious figures under Operation Lalang , and in 1998, had his deputy Anwar Ibrahim arrested. His record of authoritarianism and curtailment of civil liberties strained relationships with
31992-574: Was a haste to build great conglomerates to compete on the world stage. Many businesses ultimately failed to ensure returns and profitability. The chaebol , South Korean conglomerates, simply absorbed more and more capital investment. Eventually, excess debt led to major failures and takeovers. Amongst other stimuli, the crisis resulted in the bankruptcy of major Korean companies, provoking not only corporations, but also government officials towards corruption. The Hanbo scandal of early 1997 exposed South Korea's economic weaknesses and corruption problems to
32178-546: Was a significant enough slight to delay his entry into national politics in protest. He contested in the following general election in 1964, and was elected as the federal parliamentarian for the Alor Setar-based seat of Kota Setar Selatan . Elected to parliament in a volatile political period, Mahathir, as a backbencher , launched himself into the main conflict of the day: Singapore 's future, with its large and economically powerful ethnic Chinese population , as
32364-955: Was accompanied by the NEP's replacement, the National Development Policy (NDP), under which some government programs designed to benefit the bumiputera exclusively were opened up to other ethnicities. The NDP achieved one of its main aims — poverty reduction. By 1995, less than nine per cent of Malaysians lived in poverty, and income inequality had narrowed. Mahathir also introduced the Bangsa Malaysia policy, which aimed to facilitate greater representation of non-Malay ethnicities in Malaysia . Mahathir's government cut corporate taxes and liberalised financial regulations to attract foreign investment. The economy grew by over nine per cent per annum until 1998, prompting other developing countries to emulate Mahathir's policies. Much credit for Malaysia's economic development in
32550-581: Was also the incumbent Deputy President of UMNO seeking re-election, as well as Datuk Suhaimi Kamaruddin , the former head of UMNO Youth and president of the Belia 4B youth organisation. Team B was critical of Mahathir's policies, arguing that the Malaysian New Economic Policy had failed to benefit the poor Malays. It also criticised Mahathir's leadership style, alleging he acted unilaterally without consulting other leaders in UMNO and
32736-412: Was born at his parents' home in a poor neighbourhood at Lorong Kilang Ais, Alor Setar , in the capital of the Malay sultanate of Kedah under a British protectorate , on 10 July 1925. Mahathir's mother, Wan Tempawan Wan Hanapi, was a Malay from Kedah. His father, Mohamad Iskandar, was from Penang of Malay and Indian descent. Mahathir's paternal grandfather had come from Kerala , British India . He
32922-522: Was born with six half-siblings and two full-siblings. His childhood home, with a single shared bedroom and no electricity supply, was later converted to a tourist attraction and opened to the public. Mahathir began his education at Seberang Perak Malay Boys School, Alor Setar, Kedah in 1930. Mahathir was a hard-working student. Discipline imposed by his father motivated him to study, and he showed little interest in sports. Having become fluent in English well ahead of his primary school peers, including editing
33108-505: Was dissolved due to the crisis, and eventually Daewoo Motors was sold to the American company General Motors (GM). The International Monetary Fund (IMF) provided US$ 58.4 billion as a bailout package. In return, Korea was required to take restructuring measures. The ceiling on foreign investment in Korean companies was raised from 26 percent to 100 percent. In addition, the Korean government started financial sector reform program. Under
33294-510: Was ended when Suharto replaced Sukarno as president. The Philippines, which had withdrawn diplomatic recognition from Malaysia, also recognised Malaysia around the same time. To reflect the change of name to Malaysia, UMNO's coalition partners promptly altered their names to the Malaysian Chinese Association and the Malaysian Indian Congress . Several political parties in East Malaysia, especially Sarawak, also joined
33480-402: Was known as part of the " Asian economic miracle ". In the mid-1990s, Thailand , Indonesia and South Korea had large private current account deficits, and the maintenance of fixed exchange rates encouraged external borrowing and led to excessive exposure to foreign exchange risk in both the financial and corporate sectors. In the mid-1990s, a series of external shocks began to change
33666-412: Was not a candidate in the 1959 election , ruling himself out following a disagreement with then Prime Minister Tunku Abdul Rahman . Their relationship had been strained since Mahathir had criticised Tunku's agreement to retain British and Commonwealth forces in Malaya after independence. Tunku opposed Mahathir's plans to introduce minimum educational qualifications for UMNO candidates. For Mahathir, this
33852-399: Was only lifted in 1981 under Mahathir's premiership. Academics R. S. Milne and Diane K. Mauzy argue that Mahathir's relentless attacks were the principal cause of Tunku Abdul Rahman's downfall and subsequent resignation as prime minister in 1970. Tunku's successor Abdul Razak Hussein encouraged Mahathir to return to UMNO and appointed him Senator for Kedah in 1973. Mahathir rose quickly in
34038-412: Was set as 31 August 1957 on the condition that an independent commission is set up to draft a constitution for the country. The Alliance government was also required to avoid seizing British and other foreign assets in Malaya. A defence treaty would also be signed. The Reid Commission , led by Lord William Reid , was formed to draft the constitution. Although enshrining concepts such as federalism and
34224-400: Was sworn in as prime minister on 16 July 1981, at the age of 56. He was the first commoner to hold that office. In an interview, Mahathir remarked that major power rivalry in Southeast Asia is dangerous, but "on the other hand, a lack of U.S. interest is also problematic. It creates the impression that Russia can act as it pleases." One of his first acts was to release 21 detainees held under
34410-433: Was the anointed successor to the prime ministership. Mahathir is regarded as having been a successful Minister for Education and then Minister for Trade and Industry (1978–81). In the latter post, he implemented a "heavy industries policy", establishing a HICOM , a government-controlled corporation, to invest in the long-term development of manufacturing sectors such as an indigenous car industry. He spent much of his time in
34596-401: Was the first prime minister that was not born into the aristocracy or a prominent religious or political family. Mohamad Iskandar was the principal of an English-medium secondary school, whose lower-middle-class status meant his daughters were unable to enrol in a secondary school. Wan Tempawan had only distant relations to members of Kedah's royalty. Both had been married previously. Mahathir
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