TUN MAHATHIR MOHAMAD – Economic policies
During his term in office, Mahathir turned Malaysia into a regional high-tech manufacturing, financial, and telecommunications hub through his economic policies based on corporate nationalism, known as the various “Malaysia Plans” which set out the government middle-term objectives. These policies with strong Keynesian tendency remained in effect almost to the end of his tenure in office.
His pet projects have included Perwaja Steel, an attempt to emulate South Korea and Japan, the Proton car company, and Astro, a satellite television service.
Mahathir is credited with spearheading the phenomenal growth of the Malaysian economy, now one of the largest in Southeast Asia. Growth between 1988 and 1997 averaged over ten percent and living standards rose twentyfold, with poverty relatively almost eradicated and social indicators such as literacy levels and infant mortality rates becoming almost on par with developed countries.
During this period, Mahathir embarked on various large scale national projects, such as the North-South Expressway, Multimedia Super Corridor, the planned capital city of Putrajaya, Johor’s Port of Tanjung Pelepas, Kuala Lumpur International Airport, the Bakun Dam in Sarawak, and the Petronas Towers.
While such projects have their benefits, corresponding high costs have made some Malaysians reluctant to engage in more of such ventures, believing that the money can be better spent on other areas of development. On the other hand, Mahathir has always argued that such projects yield a direct return to the economy, apart from just serving the national pride, as government spendings in turn create jobs along with other multiplier effects. Mahathir has also been criticised for the failures and inefficiency of some of his pet projects. Perwaja Steel eventually failed and had to be rescued by a corporate white knight. Its chairman, Eric Chia, faced charges of corruption in 2004. Proton eventually had to be bought by Petronas when its parent DRB-HICOM found itself over-extended, and is still currently fighting to become profitable. Astro enjoyed a monopoly on pay television services in Malaysia until 2005 when it ended with the granting of a licence to a rival MiTV
The Bakun Dam project was to be managed by a local construction firm, Ekran Berhad. It issued a 1-for-1 on time rights issue which was 63% undersubscribed (the first time in Malaysia for an event of this magnitude). Ekran’s chairman, Ting Pek King, had to purchase all unsubscribed shares at a cost of $500 million ringgit due to his agreement with the underwriters. Subsequently the dam project was taken back by the government which was obliged to pay Ekran for the work already completed.
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- 20092009-11-29T13:30:43+00:00302009bUTCSun, 29 Nov 2009 13:30:43 +0000 23, 2009 / 1:30 PM
- Tun Mahathir Mohamad