Privately, even Anwar and his supporters complained about what Daim
was up to and the fact that Mahathir
continued to allow him to carry on. To a large extent they had been
left out of the real "goodies", but far less
so than the rest of the population (most of whom are "cronies" of Mahathir
as he himself put it).
Dissatisfaction with the resulting inequities and the possible ill-effects
of Daim’s deeds became the rallying
war-cry of "greater social justice" which Anwar and his followers used
to justify their increasingly urgent
claim to inheriting the mantle of leadership of UMNO.
All in all, the scenario for the ultimate economic disaster had been
set, but the Malaysian government forged
ahead relentlessly and unheedingly, seemingly caught up with the early
success of these policies, the
implementation of which left much to be desired and carried within
it the seeds of self-destruction. Early
warnings (as early as a year before the crisis) of an overheating economy
by local as well as foreign
economists and agencies were disregarded and brushed aside as the jealous
rumblings of envious foreigners
and disgruntled locals who had been left out of reaping the benefits
of the Malaysian government’s policies
and recipes for economic development. Benefits of course did flow downwards
to a certain extent. This was
used to show that the government was really doing its job and kept
the general public satisfied and even
lulled into a sense of complacency.
The bulk of the initial benefits accrued to politicians and connected
businessmen, many of whom found
themselves millionaires and billionaires practically overnight with
little effort other than their connections or
the schools to which they had been and being seen in the right places
and at the right time supporting the
powers that be, in particular Mahathir. This sycophantic approach worked
for a while, until the short-cuts
that had been taken led to mismanagement and the misuse of public investors’
funds for the benefit of
controlling shareholders at the expense of minority investors’ interests.
Perhaps foreign investors saw this
and were willing to overlook it for short-term gain, but it also provided
them with the real excuse they
needed to dump their shares when the market became too hot, justified
or not.
The relevant Malaysian regulatory authorities such as the Economic Planning
Unit, the Foreign Investment
Committee, the Securities Commission and the Kuala Lumpur Stock Exchange
and the various government
ministries under instructions from the political leadership failed
to properly evaluate proposals which they
had to consider in the general investing public’s interests. Vested
interests ruled the day and many schemes
were approved which put that investment at risk.
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