Yet, during the so-called "good" times prior to the economic crisis, mansions worth millions were built by
Ministers and Deputy Ministers, other ruling party Members of Parliament and of course their business
cronies and furnished with imported furniture and fittings also worth millions. Lavish and extravagant
lifestyles became the norm for the new elites, the Melayu Baru who hardly a few years ago were still
struggling but now went overboard in their excesses. Life in the villages, of course, hardly changed as much,
and the people in the rural areas - the grass roots and backbone of UMNO - hardly knew or cared what
their leaders were really up to.

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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