The expiry of the Malaysian New Economic Policy (NEP) in 1990 gave Mahathir the opportunity to outline his economic vision for Malaysia. In 1991, he announced Vision 2020, under which Malaysia would aim to become a fully developed country within 30 years. The target would require average economic growth of approximately seven per cent of gross domestic product per annum. One Vision 2020's features would be to gradually break down ethnic barriers. Vision 2020 was accompanied by the NEP's replacement, the National Development Policy (NDP), under which some government programs designed to benefit the bumiputera exclusively were opened up to other ethnicities. The NDP acheved success in one of its main aims, poverty reduction. By 1995, less than nine per cent of Malaysians lived in poverty and income inequality had narrowed. Mahathir's government cut corporate taxes and liberalised financial regulations to attract foreign investment. The economy grew by over nine percent per annum until 1997 prompting other developing countries to try to emulate Mahathir's policis. Much of the credit for Malaysia's economic development in the 1990s went to Anwar Ibrahim, appointed by Mahathir as Finance Minister in 1991. The government rode the economic wave and won th
1995 election with an increased majority.
Mahathir initiated a series of major infrastructure projects in the 1990s. One of the largest was the Multimedia Super Corridor, an area south of Kuala Lumpur, in the mould of Silicon Valley, designed to cater for the information technology industry. However, the project failed to generate the investment anticipated. Other Mahathir projects included the development of Putrajaya as the home of Malaysia's public service, and bringing a Formula One Grand Prix to Sepang. One of the most controversial developments was the Bakun Dam in Sarawak. The ambitious hydro-electric project was intended to carry electricity across the South China Sea to satisfy electricity demand in peninsular Malaysia. To deliver the project, Mahathir and the local Barisan Nasional government selected a head contractor close to Mahathir without and open tendering process. The project subsequently suffered from environmental protests, conflicts betweenn contractors, and opposition from the 10,000 residents who would be forcibly displaced from the Sarawak jungle. Work on the dam was eventually suspended due to the Asian financial crisis.
The financial crisis threatened to devastate Malaysia. The value of the ringgit plummeted due to currency speculation, foreign investment fled, and the main stock exchange index fell by over 75%. At the urging of the Internation Monetary Fund (IMF), the government cut spending and raised interest rates, which only served to exacerbate the economic situation. In 1998, Mahathir reversed this policy course in defiance of the IMF and his own deputy, Anwar. He increased government spending and fixed the ringgit to the US dollar. The result confounded his internation critics and the IMF. Malaysia recovered from the crisis faster than its Southeast Asian neighbours.
In the domestic sphere, it was a political triumph. Amidst the economic events of 1998, Mahathir had sacked Anwar as Finance Minister and Deputy Prime Minister, and he could now claim to have rescued the economy spite of Anwar's policies.
Mahathir had become the county's "uncrowned king".
What is there to be hated on this amazing man!
Thank you.
