Travel Reference
In-Depth Information
Economic & Political Crisis
In 1997, after a decade of near constant 10% growth, Malaysia was hit by the regional cur-
rency crisis. Characteristically, Mahathir blamed it all on unscrupulous Western speculators
deliberately undermining the economies of the developing world for their personal gain. He
pegged the Malaysian ringgit to the US dollar, bailed out what were seen as crony compan-
ies, forced banks to merge and made it difficult for foreign investors to remove their money
from Malaysia's stock exchange. Malaysia's subsequent recovery from the economic crisis,
which was more rapid than that of many other Southeast Asian nations, further bolstered
Mahathir's prestige.
At odds with Mahathir over how to deal with the economic crisis had been his deputy
prime minister and heir apparent, Anwar Ibrahim (
www.anwaribrahim.com
)
. Their falling
out was so severe that in September 1998 Anwar was not only sacked but also charged with
corruption and sodomy. Many Malaysians, feeling that Anwar had been falsely arrested,
took to the streets chanting Anwar's call for '
reformasi'
. The demonstrations were harshly
quelled and in trials that were widely criticised as unfair, Anwar was sentenced to a total of
15 years' imprisonment. The international community rallied around Anwar with Amnesty
International proclaiming him a prisoner of conscience.
BN felt the impact in the following year's general elections when it suffered huge losses,
particularly in the rural Malay areas. The gainers were the fundamentalist Islamic party,
PAS (standing for Parti Islam Se-Malaysia;
www.pas.org.my
), which had vociferously sup-
ported Anwar, and a new political party, Keadilan (People's Justice Party;
www.keadilanrakyat.org
)
, headed by Anwar's wife, Wan Azizah.
Dr Mahathir Mohamad's first book,
The Malay Dilemma,
in which he postulated that Malay backwardness
was due to hereditary and cultural factors, was banned in 1970.
