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Early on in his tenure, Mahathir stripped Malaysia's monarchy of its royal veto, strengthening the executive branch's authority. When the Supreme Court threatened the legality of UMNO, he arranged for the dismissal of more than half the bench. Mahathir also employed the Internal Security Act, a draconian preventive-detention law, to imprison without charge some of his most vocal opponents. But he used his clout to bring people up, too, handpicking tycoons such as Eric Chia to run state firm Perwaja Steel. And by virtual diktat, he unleashed a building spree of skyscrapers, dams, airports, stadiums. "I think very far ahead, not 10 years, 20 years, [but] 100 years ahead," Mahathir says. "All these things that I caused to be built are actually essential to this country."
The propensity to strike first and explain later backfired in 1998 when Mahathir engineered the downfall of his former deputy Anwar Ibrahim, who had been calling for a corruption cleanup within UMNO. Anwar was subsequently sentenced to 15 years in jail for sodomy and abuse of power, a conviction condemned by human-rights groups. Soon after Anwar was dispatched to prison, Malaysia's main opposition party, the Islamic Party of Malaysia (PAS), stunned UMNO by capturing control of two states, in part because of its antigraft platform. By the end of Mahathir's reign, even the urban middle class created by his export-driven policies no longer supported him unconditionally. "The good human-capital policies Mahathir put into place were what made a civil society that could think and speak out," says Shahrir Abdul Samad, a member of UMNO's Supreme Council. "But Mahathir couldn't handle what he had created. He understood buildings but not people."
The man Mahathir finally chose to succeed him could not be more different. Abdullah, 66, made his name in UMNO as the quiet, harmony-seeking underdog. Where Mahathir was blunt and uncompromising, Abdullah was soft-spoken and amiable. "Abdullah is not as smart as Mahathir," says longtime Mahathir friend and retired civil servant Shaari Daud. "But unlike Mahathir, he consults the cabinet." Five months after he took over in October 2003, Abdullah surprised even his supporters by winning the largest-ever mandate in Malaysian electoral history. His campaign pledges to distribute wealth more equitably and to root out corruption clearly resonated. Showing independence from his mentor, Abdullah canceled some of Mahathir's more profligate megaprojects. Steel magnate Chia was charged with criminal breach of trust, while the sentence against Anwar was overturned. "[Mahathir] has accused me of not doing anything for the last two years," Abdullah told TIME. "Well, I had to start off by cutting the budget deficit, reprioritize spending and maintain political stability."
Nonetheless, Abdullah has come to be seen as averse to bold action. Many of his anticorruption reforms have stalled and his economic polices haven't revved up growth, which is expected to hover around 5% next year?respectable but hardly stellar. Abdullah's focus on developing Malaysia's agricultural sector, while aimed at reducing poverty, has diverted funds from high-tech industries that had put the country into the global slipstream. "He says all the right things, but at the end of the day, he needs to actually implement the reforms," says Zaid Ibrahim, a leading UMNO parliamentarian. "Where are the concrete results?" Nor has it helped Abdullah's antinepotism campaign that his son Kamaluddin, and son-in-law Khairy Jamaluddin, are perceived as too close to the halls of power. Khairy, who is deputy chief of UMNO's powerful youth wing, has been singled out by Mahathir as an undue influence, particularly since he is only 30 years old. "I am a pretty easy scapegoat," says Khairy. "[But] the decisions Dr. Mahathir is unhappy with are entirely made by the Prime Minister and the cabinet."
If Abdullah were still at the crest of his 2004 popularity, Mahathir's sniping might be easier to ignore. But with the public beginning to perceive Abdullah as an ineffectual ditherer, Mahathir's complaints about endemic corruption and a lack of fiscal pump priming have struck a chord?even if some of these problems existed during his rule, too. More important, the war of words between Mahathir and Abdullah may be shifting focus from larger issues that urgently require national debate. "This feud is causing a lot of distraction for us," says son-in-law Khairy. "When it affects your concentration, you cannot get down to doing things."
Chief among these issues is the fate of the New Economic Policy (NEP), an affirmative-action effort initiated by UMNO 35 years ago to try to bring the majority Malays commensurate economic power. Designed to prevent a rerun of the race riots that convulsed Malaysia in 1969, the NEP has helped to create an entire strata of middle-class Malays who can compete with their Chinese and Indian counterparts. Last month, a think-tank suggested the amount of corporate equity held by Malays was far higher than the government estimate of 19%. From Abdullah downward, the government condemned the report as baseless and blamed it for stirring up ethnic sensitivities. The institute retracted the findings, causing the author to resign in protest. Meanwhile, some analysts tie the NEP's complicated racial quotas to declining FDI in Malaysia. There's no question that Malaysia is dividing along ethnic lines: Only 6% of Chinese parents now send their children to Malay-dominated government primary schools, compared to more than 50% three decades ago. "When I was growing up in Malaysia, going to national schools, I never imagined that the country would become so polarized," says Lim Guan Eng, secretary general of the Chinese-majority Democratic Action Party.
Central to the ethnic debate is how religion fits into a country that has historically prided itself on a moderate interpretation of Islam. In 2001, after PAS's shocking victory, Mahathir discarded his usually secular rhetoric and defined Malaysia as an "Islamic state." Abdullah, who holds a degree in Islamic studies, has made "Islam Hadhari," a philosophy of governance based on moderate Muslim tenets, central to his administration. But for a Muslim Malay public that is growing more conservative?the use of headscarves by women has increased dramatically?it's not yet clear whether such formulations will be enough. Mahathir, even with his Chinese chauffeur and Malay-first rhetoric, somehow managed to keep harmony among Malaysia's ethnicities. Abdullah, who recently named a Malaysian Chinese as the nation's top crime fighter, seems to share an inclusive view of Malaysian society. But critics say he has done little to combat the more extreme strains of Islam that are creeping into society?Abdullah, for instance, has supported a strict Sunni interpretation of Islam and has endorsed a "zero-tolerance policy" against anything that deviates from it. Mahathir charges: "There is the perception now that the government is weak, and therefore [conservative Muslims] can now challenge the government."
The former PM's denunciations, of course, contribute to this very sense of weakness within the Abdullah administration. But Mahathir has no intention of quieting down. "The thing about leadership in this country is that survival, not ideals, is paramount," says veteran Malaysian political analyst Chandra Muzaffar. That sentiment applies not only to the man struggling to steer his nation forward?but also to the 81-year-old ex-leader who refuses to let go of the wheel.