8 - The Opposition's Breakthrough: The Leap from 2004 to 2008

Summary

The decline of Mahathir's political leadership appeared to have come as a consequence of the Anwar Ibrahim saga. Although Mahathir was able to lead the Barisan Nasional (BN) to an electoral victory in November 1999, a legitimacy crisis occurred during his tenure. The Anwar saga exposed the dangers and deleterious consequences of party capitalism. Moreover, the emergence of the BA, the alternative coalition, and a host of civil society organizations banding around the reformasi banner and calling for his scalp, clearly left a mortal scar on the Malay leader (Hwang 2003, p. 331). As I have suggested in the previous chapter, UMNO may in fact have lost the Malay vote in 1999; the fact was there was a precipitous slippage to PAS. In September 2000 Mahathir experienced his first international snub when the Islamic Society of North America withdrew its invitation to him to be the keynote speaker at one of its meetings (Maznah 2001, p. 219). On the domestic front another electoral blow came in the Lunas by-election of 29 November 2000. Although this was a mixed constituency in Mahathir's home state, Kedah, it was a People's Justice Party (PKR) candidate who defeated the BN man by 530 votes, showing that UMNO had still not recovered from the poor showing of the last election (Maznah 2001, p. 220). Some relief came to Mahathir only in September 2001 when it became evident that the DAP was in an unhappy marriage with the PAS in the alternative front and quit participating in it.

The woes of party capitalism were far from over, even though Mahathir had apparently steered Malaysia to economic recovery. I have already alluded to the bailouts of Malay businessmen such as Mirzan Mahathir and Tajuddin Ramli. The governmental buyback of Malaysian Airlines, headed by Tajuddin, further eroded Mahathir's credibility. So too did the bailout of alleged UMNO proxy (and Daim's protégé) Halim Saad's Timedotcom by the use of state pension funds (Salazar 2004, p. 288). In fact, Halim's loss-laden flagship, the Renong conglomerate, which had debts totalling RM13 billion, was subjected to a restructuring that saw the removal of its chairman. By June 2001 Daim Zainuddin had resigned from the government, indicating there was a rift among UMNO elites in how to deal with fallen Malay corporate figures.