It's a simple pocket notebook: buff-colored, 5 cm x 8 cm, spiral-bound at the top. Malaysian Prime Minister Mahathir bin Mohamad goes nowhere without it. On trips abroad, he notes things that Malaysia might emulate, such as smooth traffic flows or how foreign supermarkets display their wares. Back home, the politician who was trained as a physician wields his notebook as an ongoing prescription pad for Malaysia's ills, even identifying the tropical foliage that needs trimming along the route to his office. And at Wednesday morning cabinet meetings, the first order of business is always the same: each of Mahathir's 23 ministers reaches into his own jacket pocket to extract an identical notebook—a management tool decreed mandatory by the anything-but-reticent prime minister.
If there's a key to Malaysia's extraordinary transformation from sleepy backwater to modern, prosperous nationhood, it can probably be found in the notebook collection of Dr. Mahathir—and what a story their pages would tell. When Mahathir began his term in 1981, his resource-rich land had an assuredly comfortable future thanks to oil and gas reserves, tin and rubber, but it was hardly destined for a conspicuous spot on the skyline of the East Asian economic miracle. Today, following eight continuous years of 8% economic expansion—only China has grown faster—there is hardly any unemployment in a land of 20 million people. Manufactured goods such as microchips and semiconductors, not materials dug from the ground or piped from the sea, account for 80% of its exports.
As to that spot on the skyline, Mahathir is raising his country's profile singlehandedly—his preferred governing style. When the state oil company's twin Petronas Towers are completed in 1997, Kuala Lumpur will have the world's tallest buildings, 7 meters higher than Chicago's Sears Tower. Along the banks of the capital's muddy Klang River, a Mahathir-backed tycoon is building what is described as a $4 billion "Linear City," which will contain a 2-km long structure said to be the lengthiest building on earth. Prosperity has clogged K.L., as the capital is known, so Mahathir is spending $8.1 billion to create a new one, Putrajaya, 25 km to the south. That will become part of yet another prime ministerial megavision: the "Multimedia Super Corridor," an investment zone for computer and information industries that Mahathir is creating to move Malaysia up the technological ladder. He has already lured one major player away from neighbor Singapore: Bill Gates has promised to put Microsoft's Asia headquarters there. "Mahathir thinks in terms of decades," says M. Shanmughalingam, a Harvard-trained economist who worked in the Mahathir government for years. "That's what sets him apart among other politicians."
With the exception of Singapore's largely retired Lee Kuan Yew and China's indisposed Deng Xiaoping, Asia has no leader with Mahathir's determination and drive—some call it hubris—or such a remarkable record. The jungle kampong where nothing much happened, the essence of Malay existence for centuries, has nearly slid into folk memory. Today half of all Malaysians live in cities. Per capita income is about $3,900 a year, almost double the level just six years ago. And the national aspiration is no longer a plot of farmland and an ox but an apartment in K.L. and a new, Malaysian-built Proton sedan.
Nearly three decades after hundreds of Malaysians were killed in racial rioting, the multi-ethnic country has never seemed as integrated as during his era. Nelson Mandela, a close Mahathir friend, plans to visit in February to study the country's 25-year-old affirmative action program. That experiment has buoyed the fortunes of native Malays and tribal groups, who comprise a slim majority of the population (62%), without inflaming the minority Chinese (27%) and Indians (8%). Other countries are studying Malaysia's handling of such potentially divisive issues as economic reform and Islamic fundamentalism, including France, Argentina, Kazakhstan, Cambodia and the Czech Republic. Says Maite Mohale, South Africa's ambassador to Kuala Lumpur: "There are lessons to be learned here."
Not all are salutary. Mahathir's ambitions are both lofty and costly: his edifice complex alone will cost the government billions and could bring on a recession. Some of his projects, notably the giant Bakun dam in Sarawak, are fiercely criticized by environmentalists. Political and economic power has become alarmingly centralized under the youthful-looking Mahathir, who turns 71 this month, and many of the benefits of his superschemes have been enjoyed by cronies. "Mahathir has given good leadership," says Param Cumaraswamy, former president of the Malaysian Bar Association, "but he controls everything."
To consolidate his power in the mid-1980s, Mahathir showed a vast disdain for such notions as freedom of speech and judicial review of executive actions. In 1988, he ended the independence of the country's British-style judiciary by deftly amending the constitution. He enjoys throwing wrenches into international economic conferences and champions trade groupings that exclude western countries. And he relishes his self-appointed role as defender of developing nations against the bullying West. The environmental movement, according to Mahathir, is a neocolonialist plot against countries with forests to chop down. The international press is almost beneath his contempt: last week he branded Australian journalists who covered Malaysia "congenital liars," prompted by those who dared to report that a mob of Mahathir supporters had disrupted a conference in Kuala Lumpur on independence for East Timor. Malaysia had opposed the meeting as a threat to its relations with Indonesia.
Mahathir is unapologetic for his insistence on doing everything his way. Although he acknowledges that he will be succeeded by deputy prime minister Anwar Ibrahim, 49, he doesn't say when. Which means Mahathir will continue lambasting the West and lashing his ministers onward for the foreseeable future . "He is the most inquisitive person I have ever known," attests Kenichi Ohmae, the Japanese management guru who has advised Mahathir on industrial policy since 1982. Ohmae recalls visiting an arid part of eastern Malaysia with the Prime Minister, who wanted to boost its vegetable and fruit production. "He turned to me," says Ohmae, "and asked, 'Can you find out how to make rain?'"
On Sept. 8, 1994, the Prime Minister cut the ribbon on an 848-km national highway linking the southern city of Johor Bahru to the Thai border. Malaysians from almost anywhere on the peninsula can now take 110-kph day trips to the capital to see their rising monuments to modernity. But a national highway in Malaysia is more than a road: it's a historic unification of a country that, from its inception, was a dangerously scattered hodge podge. Malaya, as it was once called, began as a collection of coastal trading ports, each controlled by a sultan and separated from each other by the peninsula's interior jungles and mountainous spine. Colonization by Portugal, Holland and Britain coincided with mass immigration of Chinese labor to work the tin mines and, later, Indians for the British rubber plantations. Malaya gained independence in 1957 and six years later changed its borders by inviting Singapore and the northern Borneo provinces of Sabah and Sarawak to join.
Thus was Malaysia born—the added "si" was in honor of Singapore, Sabah and Sarawak—with shifting borders, provinces scattered across the sea, and, most importantly, a great ethnic divide. (Singapore was ejected from the federation in 1965 for threatening Malay politicians' grip on power). Britain maintained that independent Malaysia was the homeland of the Malays, but they barely comprised a majority of the population; from the start, Malay politicians needed cooperation from Chinese and Indian parties to form a government. Malays could never be confident they would remain masters of their own land. And from independence, they existed at the outer fringes of the Chinese-monopolized spheres of business and commerce. In 1969, after a strong showing in a general election, members of a Chinese political party held a victory parade in Kuala Lumpur and ethnic disgruntlement flared into violence. Malay-Chinese riots went on for four days, and more than 300 people died. For the gentle, accommodating Malaysians, the incident remains a major national trauma. "I saw how the Malays hacked the Chinese," recalls Zainuddin Maidin, a journalist who covered the riots. "I don't want to see it again."
There was much soul searching afterward, and one tract became famous, written by a 45-year-old physician. "The Malay dilemma," he wrote, "is whether they should stop trying to help themselves in order that they should be proud to be the poor citizens of a prosperous country or whether they should try to get at some of the riches that this country boasts of, even if it blurs the economic picture of Malaysia a little." The author was Mahathir, a teacher's son who grew up in a small house on stilts in Kedah state, studied medicine in Singapore and was one of the earliest members of the United Malays National Organization (UMNO), the ruling political party. After the Kuala Lumpur riots, Mahathir accused founding prime minister Tunku Abdul Rahman of being pro-Chinese and was expelled from UMNO. He went back to medicine and wrote The Malay Dilemma, which was banned for, among other reasons, its assertion that genetic factors had made the Malays less dynamic than their Chinese counterparts.
Rahman's successor, Abdul Razak, brought the firebrand physician back into the party in 1972 and two years later gave him the important post of Education Minister. In 1981, Mahathir gained control of UMNO and became prime minister, as well as the stiffest of new brooms. He ordered civil servants to report to work at 8 a.m., cancelled morning tea breaks and installed time clocks. The rules apply to all: each morning and evening, the Prime Minister punches in and out of the office.
Mahathir inherited the New Economic Policy, the post-1969 governmental solution to the Malays' dilemma. It was a comprehensive affirmative action program, with quotas on university admission, bank lending and equity ownership in companies, and was designed to give a permanent economic lift to bumiputras, literally "sons of the soil." That classification included Malays as well as the non-Malay indigenous tribes on Sabah and Sarawak and the peninsula; it excluded the Chinese and Indian populations.
Mahathir backed the program, but a 1985 recession and a steep decline in his government's popularity forced him into some fresh economic thinking. First he toned down his plan to create a "Malaysia Inc." on the Japanese model, an ambition that had earlier inspired the decision to build a "national car," the Proton. He eagerly started courting foreign investment. Then he turned to adviser Daim Zainuddin, who was then finance minister, for a way to get Malaysia out of its economic hole. "I looked at the U.S. in 1929," Daim told TIME. "What they did was build highways. We had excess cement, 60,000 Malay graduates looking for work, and we had a car industry producing cars no one wanted." The idea for the North-South Highway was born. "That highway," Daim says, "was the biggest single factor in turning the country around."
Energized, Mahathir and Daim decided that the quotas and regulations of the NEP were insufficient to erect a Malay business community, so the twosome decided to do the job on their own. They identified up-and-comers and showered them with financing and government contracts. "We said: 'We'll give you opportunity and back you all the way. If you fail, don't come back,'" says Daim. Fortunes were earned by those annointees of "Mahathir Inc.," and a new bumiputra business elite was created.
At the same time, billions were squandered. In 1982, the government-controlled Bank Bumiputra lost an estimated $900 million through profligate lending to the Carrian group, a high-flying, fast-crashing Hong Kong real estate outfit. In 1988, Mahathir sent close adviser Eric Chia to straighten out a troubled government attempt at building a steel industry. This year, Perwaja Steel was declared insolvent with $2.75 billion in bad debts, and the Finance Ministry described management irregularities during Chia's tenure, including an alleged payment of $27 million to a company that didn't exist. But once honored with Mahathir's favor, few lose it completely. No one has ever been prosecuted by Malaysia for the Bank Bumiputra losses. Chia has dropped from public sight, and no charges have been filed against him. "Out of eight ideas, Mahathir accepts that three or four will fail," says another recipient of patronage from the top, Rashid Hussain, who controls DCB Holdings, one of the country's top brokerage house-banking empires. "But if the other four or five get off the ground, he's done his job."
Economists think so: many now describe Malaysia as a manufacturing economy on its way to a high-tech future, an unimaginable destiny just a decade ago. Donald Snodgrass, an American development economist at Harvard University, says Malaysia is just about the only ethnically diverse country to make that transition. "What is clear is that they have managed broad-based growth," he says, "And everybody benefitted. That's rare in any society." In Kedah state, traditionally one of Malaysia's poorest, there are now jobs galore. "If the young ones don't want to work in the fields," relates Salleh Noh, 46, a tenant farmer, "there are plenty of factory jobs." S. Gunarsingham, a Malaysian Indian who bought a taxi three months ago, agrees. "If you study hard and work hard," he says, "there's no problem."
Officially, the government claims success for the NEP, which was replaced in 1991 by a less ambitious program called the New Development Policy. Bumiputras own 20.6% of the equity of public companies, compared to about 2% in 1970, and the number of bumiputra professionals has increased five times since 1970. Those conclusions are disputed: many Chinese quietly control businesses behind equity-holding Malay front-men, the Indian community remains largely impoverished and statistics take no account of Malaysians of Chinese descent who chose to leave to avoid official discrimination. But there is a general consensus both inside Malaysia and abroad that the program has worked. "The way the Malaysians have handled their diversity is intriguing," says U.S. Ambassador John Malott, "because it's successful."
In today's Malaysia, the ethnic anxieties of the post-1969 period seem distant. Mixed marriages are steeply on the rise, and some 60,000 Malay students currently attend Chinese language schools. "We've begun to look at ourselves as a unified Malaysia," says Michael Yeoh, head of the Asian Strategy and Leadership Institute, a Kuala Lumpur-based think tank. Agrees Ahmad Rahim, a Malay truck driver: "We need each other to do business. We get along fine now." Mahathir's verdict: "What we've been able to achieve is not racial harmony but racial stability."
One wheel of progress that seems permanently welded to its axle, however, is social freedom. Malaysia's statute book is about as unyielding as China's: gatherings of four or more citizens must register with the police, individuals deemed a threat to national security can be detained without trial for two years. Mahathir, who once questioned those social shackles, turned draconian when his political career was threatened in the mid-1980s. Courts started questioning the validity of his ruling party election victory in 1987, and the supreme court declared UMNO an illegal organization. Simultaneously, financial dealings of the Prime Minister and the former Finance Minister were questioned in the international press and on the local grapevine. Mahathir's reaction was to stiffen the already oppressive Official Secrets Act and to arrest 104 academics, politicians and lawyers for allegedly threatening national security. To quell the troublesome judges, Mahathir pushed through a constitutional amendment that put the formerly independent judiciary under parliament's control. Says Chandra Muzaffar, one of the 104 detainees who was held for 52 days: "Malaysia has never recovered from that day." Investigative journalism, a profession with potential in a land where government bolsters businessmen and the ruling party itself controls billions of dollars in assets through proxy companies and individuals, is virtually a crime. Mahathir's stiffened Official Secrets Act dictates a mandatory jail sentence for anyone receiving classified material, which describes most government documents.
Giving Malaysians the social freedoms expected by a modern, prospering people is just about the only ambition Mahathir has kept out of his notebooks. Some citizens wonder whether his goal of creating a civilized, technocratic nation can be reached as long as the press is muzzled, critics are cowed by security acts dating back to colonial times and the judiciary must answer to politicians. "If we are to achieve a civil society, we must first fully democratize all aspects of public life," says Lim Guan Eng, an opposition M.P. currently on trial for sedition. He's in legal trouble for publicly questioning the way the government handled corruption and statutory rape charges against one of the prime minister's political allies. "Otherwise," says Lim "we will only create a society of carpetbaggers."
That task may eventually be taken up by Anwar, Mahathir's more liberal-minded successor-to-be, who has said he wants to amend the internal security laws and free the press from political harassment. Forsaking democratic freedoms for growth will certainly tarnish Mahathir's reputation, but his hubris-fueled successes are likely to ensure a favorable spot in history. In 1986, he decided that a neglected island called Langkawi, allegedly under an ancient curse, could be made into a tourist resort; characteristically, he planned many of the architectural features and interior designs. Last year Langkawi drew about 2 million visitors, nearly the same number of tourists who visited India. "If I thought much about what other people will think about me, there are things I wouldn't do," says the Prime Minister. "Sometimes I make decisions which I know people don't like, but I have to. I really don't care what people think about me." Only that they pay attention.