I was born in 1925 in the town of Alor Setar in northwestern Malaya (as Malaysia was then called), the youngest of 10 children. My parents belonged to the lower middle-class and we lived in what would be called a slum area today. My father worked as a schoolteacher and later as a government auditor. He brought up his family to be very orthodox, very disciplined and very oriented toward education. I was rather lucky to get a good education, first in the Malay language and subsequently at the only English-medium school in town. My mother had a religious education and taught me the Koran. Although my family was not fanatically religious, we did adhere very closely to the Muslim faith. This gave me a very good starting point in life: a strong family, a solid education and a good religious grounding. I harbored no great ambitions as a teenager. When I was in secondary school, I thought the greatest thing I could do was to join the state civil service, but I never really believed this would be possible. We had no ties to the royal family, nor did we belong to the prominent families of the state. The rich families lived in the northern part of town; we lived in the southern part. And the Europeans, of course, lived in their own quarters. They were very exclusive with their own clubs and private golf course and did not mix with the local population.
The Malay Peninsula was at that time, before World War II, under British rule. We were divided into many different Malay states, and each state had its own treaty with the British. The treaties were for British protection, it was said, not colonization. The British were not too repressive. They could have colonized us fully from the beginning, but chose to create a protectorate image. Although the British actually controlled the administration fully, they managed to give the impression that the locals had status and authority. The Malaysian sultans were called the rulers by the British, although they were never really given any power to rule. The British did not send a governor to our country, but an official they called a British Adviser. In reality, however, his advice had to be strictly followed.
The British were extremely clever at this form of semi-colonial rule: they would call things by one name, but in reality do quite another thing. What we did get from them was a well-organized administrative system and a fairly well-developed infrastructure. What we also got, however, as a psychological burden, was the belief that only Europeans could govern our country effectively. Most of Asia in those days was controlled by the Europeans. Most Asians felt inferior to the European colonizers and rarely did we even consider independence a viable option.
Then, in 1941, the Japanese Occupation completely changed our world. Not only did the Japanese forces physically oust the British, they also changed our view of the world. It was a very frightening experience. We switched from one set of rulers to another virtually overnight. My English school was immediately closed and a Japanese school was opened in a smaller building. At first, I did not want to go to the Japanese school. I was 16 at the time, and after the English school had been closed, I was selling bananas at one of the small marketplaces in town, but my father insisted that I go to school in order to get an education. We now had to study the Japanese language, and although I did not master it very well, I did become the class prefect. I was not violently opposed to the Japanese, but I thought they should leave the country and let the British return. I yearned, not yet for independence, but for the return of the British. I had been educated in an English school, and life had seemed so much easier during the British period.
The Road to Self-Rule
The Japanese rule lasted about three years. There is no doubt in my mind that people across the Asian continent suffered immensely from the war and many were unjustly killed or captured. The initial Japanese defeat of the Europeans did, however, also have another psychological effect on many Asians. Before the war, when Malaya was under British rule, our entire world view was that we had no capability to be independent. We thought that only the Europeans could run our country and felt we had to accept their superiority. But the success of the Japanese invasion convinced us that there is nothing inherently superior in the Europeans. They could be defeated, they could be reduced to groveling before an Asian race, the Japanese.
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I was now in my early 20s and started what was to become a lifelong involvement in politics. I got together with my classmates and quietly we began agitating against the Malayan Union proposal. We were not allowed to be involved in political activity, so most of our work took place at night. Immediately after the war, the blackout of the town was still in effect, and we moved around in the middle of the night putting up posters with political messages. Our objectives were still very limited; all we were trying to do was to put an end to the Malayan Union and return to protectorate status. We were very young and had a lot to learn about organization, about campaigning and about how to rally people for public meetings. We had to devise ways of overcoming repression and a shortage of funds. A very skillful friend of mine would cut potatoes to make print blocks, and we used Chinese ink to print words and letters on our posters. This led to the impression that we were professionally printing our material. So all the printing shops in town were investigated by the British, but with no result. I always ended up taking a leading role, and my classmates naturally accepted my self-projected leadership. I would usually choose to be the secretary or the second man rather than the president of whatever movement I was in simply because the second position involved more organizational work and direct contact with other groups. I organized the first Kedah Malay Youth Union, and later the Kedah Malay Union, a political party that evolved into what is today the ruling party of Malaysia, the United Malays National Organization (UMNO).
Our efforts eventually bore fruit. The British had to give up their ideas of a Malayan Union. I thought that was the end of our struggle, but some of the leading people in UMNO started to campaign for full independence. Personally, I was still not convinced that we would be able to manage on our own. Malaysia was, and still is, a multiracial country with Malays, Chinese and Indians making up the three largest ethnic groups. Statistically, the Malays comprised by far the largest group, but in terms of wealth and economic clout, the Chinese were much more powerful. The largest challenge for us was not necessarily how to get the British out of the country, but how to manage our own multiracial population after independence.
I felt the need to get a higher education to be accepted as a leader, and rather than devoting my entire career to politics, I chose to go to Singapore in 1947 to study medicine. The six years from 1947 to 1953 were mainly devoted to my studies, and my political activities were put on the back-burner. While in Singapore I was still following the developments in Malaysia keenly. At my college I was also organizing Malay student groups, not so much for political purposes, but rather to help them achieve better academic results. Singapore was also the place where I met my wife, Siti Hasmah Mohd Ali. We went to the same college, and before my first year was over we had become steady. Although there was no formal engagement until we had graduated, we assumed from the beginning that we would eventually get married.
The postwar years were a time of reconstruction and upheaval in Asia as well as in Europe. Countries badly scarred by years of fighting started rebuilding their economies and many Asian colonies began to question the right of European nations to rule the region. My friends and I used to follow the struggle for independence in other Asian countries closely. We saw what was happening in India and Pakistan, and we collected funds to support the Indonesians in their fight against the Dutch. Developments in other countries in the region influenced us, and the talk of independence was very much in the air. A sense of an Asian identity was emerging. It was on Aug. 31, 1957 that Malaysia finally became an independent nation. I had returned from Singapore in 1953 and was employed as a doctor in the government service. As a civil servant, I was not allowed to be active in politics, and I was thus only marginally involved in the events that led to independence. There was a certain euphoria in the first days of independence, but this feeling quickly gave way to concern about how to govern the country on our own.
Just before independence, I decided to leave my position as a doctor in the government service to set up my own medical practice. This was the only way I could be more actively involved in politics. When I look back, I think my medical training and years as a practitioner have stood me in good stead. When I was an active practitioner, I used to be able to diagnose people very quickly. That training later became very useful to me in politics, where you constantly need to gauge people's reactions and must be able to tell whether or not you are hearing the truth. While working in my medical practice, I also deepened my involvement in national politics. I was appointed to a senior post in the state branch of UMNO and despite working long hours at my clinic, I always managed to find time for political activities.
I first became a member of parliament in 1964 at the age of 39. I was always quite outspoken and would sometimes argue with the leadership of the party concerning their policy choices. In 1969, I stood for my second election. At that time, I was of the opinion that the Malays, the country's largest ethnic group, were not too happy with what independence had brought them. The ordinary Malays were not faring any better than in colonial times; economically and educationally they remained backward. The election of 1969 gave the Alliance coalition, which was headed by UMNO, only a very small majority, and in some states we were unable to form a government. A very unstable and volatile situation arose and the crisis culminated when race riots broke out in Kuala Lumpur on May 13, 1969 with serious fights between the Chinese and the Malays. I blamed the political leadership of UMNO for the riots and wrote a strong letter to the Prime Minister, Tunku Abdul Rahman, urging him to resign. I pointed out to him that the wrong policies had been chosen for a multiracial society, but this kind of candid criticism was not tolerated. I was expelled from the party.
For three years I was exiled from politics in my own country. My break with the Tunku and the political leadership in 1969 has been documented and analyzed extensively and need not be repeated here. Suffice it to say that an equitable racial policy is of the utmost importance in a country with several different ethnic groups who were not enjoying the same level of economic prosperity. This remained the largest challenge in creating a stable society and later became the central theme of my political actions as a leader of the country. I was reinstated as a member of the party and as a senator in 1972 and was given my first cabinet post as Minister for Education after I won the 1974 elections. Only two years later, in 1976, I was appointed Deputy Prime Minister, and this naturally set me on a course to become Prime Minister in 1981.
Rebuilding East Asia
Today, the peoples of East Asia are facing a monumental task. Although we have not been the victims of conventional warfare, the job of rebuilding ravaged economies is not unlike that of rebuilding a country after a devastating war. One crucial difference, however, obscures our prospects for rapid recovery: unlike after a war, we have no clear idea of who our allies and enemies are. We cannot even be sure of the rules of the game we are now about to play, and we have no guarantee that further attacks on our economies will not occur. We have tried to defend ourselves as best as we could, but, for some of us, every move we make to revive our economies has been immediately condemned as a ploy to help members of the ruling parties and their cronies.
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Rebuilding, however, cannot be done in isolation; creating a better, more livable and humane world for the coming millennium requires soul-searching, which is just as global and intense as the flows of electronic capital searching for profits. Rebuilding East Asia may provide a much-needed opportunity to redesign the world's financial architecture. The International Monetary Fund, rightfully proud of its role in rebuilding a postwar world of sovereign trading nations, is clearly incapable of dealing with a global financial crisis such as the one that has ravaged the East Asian economies. It is no exaggeration to say that the IMF demands on Indonesia were largely responsible for the riots and uprisings that led to the downfall of President Suharto. Fortunately, Malaysia did not take the IMF's bitter medicine; we considered the medicine more dangerous than the disease and were stubborn enough to refuse it. Had we acquiesced, we might very well have found ourselves in an even more dire situation than we are in today, deprived not only of money but also of our ability to govern ourselves within our own borders. The pressing question today is not whether, or how, we can fine-tune the mechanisms applied by the IMF; bluntly stated, the real issue is whether we will willingly allow our economies to be governed by a doctor with only one pill for every illness and by a bunch of yuppies with no sense of history or human responsibility. My answer to that question would have to be a resounding: No!
So, what will work? A Malay proverb says, If you lose your way, go back to the beginning. To invent new ways of doing anything, it is worthwhile to reexamine the old ways to identify their strengths and their faults, and then to modify them or invent totally new methods. This is exactly what Malaysia did in September 1998 [by imposing currency controls]. It must be admitted, though, that what Malaysia is doing is not guaranteed to succeed. Like all strategies, there are weaknesses and flaws and even the possibility that we ourselves will undermine what we are doing. Of course, the West will try to break us, to find fault lines which can be widened and prised apart. We must be prepared for this, to protect ourselves and our strategies and to innovate. We have to continuously adjust to the situation and take whatever measures are required. We must not gloat just because some people have already admitted that we have done the right thing. We cannot afford to pat our backs too soon. We still have not managed to gain a wider acceptance for our call to regulate speculation worldwide.
To rebuild East Asia and the global economy, we now urgently need to engage in a sincere discussion about what constitutes sound governance in the contemporary world. When we used to talk about governance, we generally meant the exercise of political, economic and administrative authority to manage a nation's affairs. Current conditions, however, have shown that governance is no longer the exclusive domain of the state. Various bodies, almost all self-appointed, now claim a right to have a role in the governance of a country, including both the so-called non-governmental organizations, which tend to act in concert with counterparts in other countries, and an array of international organizations. The exact role and rights of these different organizations have never been clearly defined. Although there are many serious and hardworking NGOs, many also tend to take the law in their own hands, exerting dubious influence through highly undemocratic ways. The supranational bodies controlled by the Western nations all tend to impose their own world view and methods on the rest of the world, totally disregarding the principles of national sovereignty which they so proudly claim were championed by their very forefathers.
A new and powerful claimant has now entered the field of governance. In a world that is more and more preoccupied with economic wealth to the exclusion of political and social well-being, market forces have laid claim to a dominant role in governance. Unabashedly, market forces refusing to recognize national borders now assume that they have a right even to discipline national governments. Not surprisingly, the only concern of market forces is the maximization of profits, regardless of the harm this may cause for people other than the immediate beneficiaries.
Who or what are the market forces? Strictly speaking, all consumers and everyone involved in businesses, big and small, should be considered part of the forces of the market. But, of late, the market forces that really matter--and that play a significant role in any discussion about global governance--are primarily the capitalists and the funds that invest in shares and trade in currencies. They have become the definitive market forces simply because they can exert tremendous influence over the performance of the economies of countries. Market forces have advocated the free flow of unlimited capital across borders so that they can invest without restriction and maximize their profits. They insist that this is the essence of free trade; without the free flow of capital across borders there can be no free trade.
Some vehemently argue that the global economy is and should be totally self-organizing, the only way, they say, to maximize efficiency, which in turn leads to increased wealth and better living standards. Unfortunately, this is expecting too much of mere mortals. Besides, it is not possible for everyone to determine what is right and what is wrong; what feels right to one person may appear to be wrong to another. Without a player with the power to decide, to arbitrate and to enforce, a self-regulating society or self-organizing global economy is doomed to perpetual conflict and turmoil, if not outright anarchy. Society thus requires a regulatory institution possessing the required authority. Current wisdom says that, at least within a nation, only an institution chosen by a majority can govern fairly. But when other forces who have never been given the authority to act on behalf of the people are also admitted into the process of governance, then we move far beyond the relatively clear boundaries of established political science. We do not yet know what form of governance would function best in a global economy with such diverse players, new and old. What we do know, however, is that when some of the most powerful actors act in their own narrow interests and according to their own self-serving perceptions, then society is threatened by a backlash of anarchy and injustice. Certainly when the so-called market forces decided to discipline the governments of East Asia by impoverishing them and millions of their people, the causes of justice, human rights and democracy were clearly not served.
If the situation in East Asia should continue to deteriorate, there is a very real danger of unrest, uprisings, the overthrow of democratically elected governments and even small-scale guerrilla wars. I doubt that we will ever see outright wars sparked by the present crisis, but urban guerrillas and saboteurs and modem terrorists with a bewildering variety of motives may very well flourish as a result of the tensions created within and between societies. The recipe to avoid such a situation is not all that complicated: allow us to revive our economies. Do not try to undermine our efforts and do not sabotage us. Do not ruthlessly devalue our currencies. We are quite capable of reviving our economies and could do so in a matter of months if allowed to go about the task free from destructive interference.
The key players in overcoming the present economic malaise are not, as often suggested, Japan or other East Asian countries. Rather, it is the Western countries that have real leverage over the global economy. Most likely, it is only the United States that has the combined political, economic and military clout to bring about structural changes in the present system of global finance and global economic transactions. The American government could even outlaw speculative currency trading, if it so desired.
If we hope to manage the Asian financial crisis and prevent recurrences, we have to deal with currency speculation and manipulation. Ideally, currency trading that is purely for speculative purposes should be completely banned. If that cannot be achieved, such transactions must at least be heavily taxed and regulated. Currency trading must be forced out into the open. It must be registered and licensed in the countries where traders operate, and taxes must be paid to the countries whose currencies are being used to generate profits. Furthermore, the amount that can be traded per day should be limited and any currency should be allowed only to fluctuate within a certain margin before trading is stopped. Such rules and laws would obviously prevent the traders and funds from making the kind of profits they have become accustomed to making. But why should we feel the least bit obliged to protect the excessive profitability of currency trading?
We must always be willing to ask ourselves openly and frankly if the actions taking place on the economic stage are serving a greater good or merely enriching a few capitalists. We must not simply discard higher ideals and blindly worship the utopian free markets, which claim that the freedom of money movements ranks higher than the welfare of people.
Excerpted from A New Deal for Asia (Pelanduk; 155 pages)
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