Is Daim on the way out as Finance Minister with Ali Abul Hassan Sulaiman as the de facto Finance Minister

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Media Statement
by Lim Kit Siang 

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Yesterday, when the major Asian stock markets rallied, driven by positive news out of the United States technology sector and a weakening of the US dollar against the yen, Malaysia was the exception. South Korean stocks made the biggest gains, with the Korea Composite Stock Price Index climbing 5.1%.  In Tokyo, the Nikkei 225 Index surged 4.4%. The Thai stock benchmark advanced 3.7% while the share indexes rose nearly 3% in Hong Kong and Singapore. Malaysia Kuala Lumpur Composite Index (KLCI), however, went south and dragged stocks down for a second day, declining by 0.88%!

This sorry tale has been repeated today.  At about 4 p.m., the major Asian stock markets continued their rallies, with their share indexes chalking up gains: South Korea 4.32%, Singapore 2.57%, Taiwan 1.81%, Thailand 1.76% and Japan 1.66% while Malaysia continued to be the “sick man” of the Asian dragons and tigers, declining by 0.25%.

There have been frequent rumours of rifts between Mahathir and Daim, and the question uppermost in the country and market is whether the latest development presages a final break-up of the two leading to Daim’s departure as Finance Minister.

Officially, the government has denied that Daim was resigning or has been been relieved as Finance Minister or that he took leave to protest against the appointment, announced this week, of former central bank governor Ali Abul Hassan Sulaiman as one of Mahathir's economic advisers.

"He was already on leave before the appointment," an  official said.

Mahathir told reporters Daim had informed him that he wanted to rest.

"Daim is tired," he said. Mahathir said there would not be an acting finance minister.

Daim would be represented in cabinet by Entrepreneur Development Minister Nazri Aziz.

"Daim is still around and he goes to the office once in a while to check on documents," the premier added.

A government official said Daim had been on leave for a week.

Malaysians must find these developments in  the stewardship of the country’s finances most bizarre and irresponsible:
 

• A Finance Minister taking leave for two months  when the country is facing a second economic crisis in four years;
• No appointment of an acting Finance Minister, but merely the appointment  of a junior Minister to represent the Finance Minister in Cabinet;
•  The appointment of  Tan Sri Ali Abul Hassan Sulaiman as the Prime Minister’s  special adviser on economic matters, when it is open secret that Ali Abul Hassan broke with Daim when he was Bank Negara Governor by supporting the Prime Minister in scuttling Daim’s plans to merge all banks and financial institutions into six core groups and expanding them to ten.
• Is Daim on the way out as Finance Minister with Ali Abul Hassan Sulaiman as the de facto Finance Minister, with Nazri Aziz as the Cabinet errand boy to keep up the proper appearances in Cabinet?

If the end has come in the partnership between Mahathir and Daim, the rift had been kept very secret although there were straws in the wind that something was amiss, such as:
 

• The Prime Minister announcing the RM3 billion economic stimulus package when it should be announced by the Finance Minister, followed up by a mini-budget presentation in the Dewan Rakyat for parliamentary scrutiny and sanction.
• The failure of the Finance Minister to gazette the reduction of the EPF employees’ contribution from 11 per cent to nine per cent, without which the two per cent EPF cut is unlawful and cannot be legally implemented.
• The appointment of Ali Abul Hassan, whose tenure as Bank Negara Governor was terminated by Daim, as the Prime Minister’s special economic adviser.

(19/4/2001)