By P. Gunasegaram
He was an enigma, complex and complicated, whose commercial interests ranged far and wide, straddling both government and the corporate sector. He has laudatory achievements in government as finance minister but at the same time earns a contrary one as a person who politicised business.
Powerful as he was, Daim Zainuddin owed that almost entirely to the implicit and explicit trust generously bestowed upon him by the country’s fourth (1981 to 2003) and seventh prime minister (2018 to 2000), Mahathir Mohamad, who called upon him to help at three crucial times.
Daim was parachuted into the finance minister’s post by Mahathir in 1984, then PM for three years from 1981. He never served on the cabinet before that, representing a huge jump up in his standing and a slap across the face for previous finance minister Tengku Razaleigh Hamzah.
Razaleigh went on to challenge Mahathir for Umno’s presidency in a bruising battle which he narrowly lost in 1987, leading to a court battle and the formation of a new Umno Baru, the old Umno’s assets being vested with the official assignee.
Behind the scenes
Behind the scenes, Daim as Umno treasurer played a huge role, which he denied, in the distribution of the Umno assets, much of which landed on the lap of his cronies and trusted lieutenants.
But before that, soon after his appointment as finance minister, Daim had to deal with an economic recession in 1985 when commodity prices collapsed across the board. It was in 1985 that I first met Daim face-to-face when I was a specialist writer at the then Business Times.
The occasion was an off-the-record lunch at his office between him and selected media members and we were invited to be open with our questions. Already he was embroiled in controversy over his bank acquisition dealings.
He had opportunistically bought the Malaysian operations of a French bank in Malaysia, Bank Indosuez, flipping it for a 40% in United Malayan Banking Corp two years later and pocketing a cool RM125 million in the process. Later he would emerge as an interested party in Alliance Bank in which Singapore’s Temasek Holdings also has an interest.
The vehicle he used was called Langkah Bahagia. I asked him at that lunch whether he was linked to it. He looked around at his officials and asked them if they had heard of the company. They shook their heads – that was his answer.
Good job with the economy
By almost all accounts he did a good job of turning the economy around from negative growth in 1985, freezing New Economic Policy equity requirements and turning the tap fully open for foreign investments by relaxing equity and other restrictions. He cut government spending to the bone, an unpopular move.
It was soon the golden age again with foreign investments leading a resurgence in the economy with a growth of over 9% in 1989, a remarkable turnaround which received all-round acclaim, even from economists who had been critical of his policies, including Jomo Sundaram and R Thillainathan.
But one thing that was established during this time was Daim’s unshakeable loyalty to Mahathir. He helped him behind the scenes politically with the Razaleigh tussle and the subsequent legal wrangles leading up to the fight with the judiciary, when independent judges were dismissed through a hastily assembled tribunal.
I met Daim again face-to-face in July 1990. I was then editor of Malaysian Business magazine and one of our writers S Jayasankaran, already then one of the finest writers in the country who could put a story together better than most, had arranged an interview with him.
Jaya wrote the cover story for the issue.
Doing Good by Doing Bad
The headline – “Doing Good by Being Bad” and the tagline” Daim Gets Kudos for Fiscal Management but Brickbats for Politicising the Economy” summarised it well. While Daim was applauded for his deft management of the economy there was an underlying unease about the way projects and contracts were going the way of cronies and Daim’s people.
The following year, 1991, Daim left to go back to business and the rapidly rising Anwar Ibrahim took his place. And I was eased out of Malaysian Business, no not for the Daim cover but an innocuous fair article by a staff writer detailing how Proton distributor Edaran Otomobil Nasional (EON) was making excessive profits from “compulsory accessories”. Proton was taboo because it was Mahathir’s pet.
Malaysian Business was part of the New Straits Times group. Its group editor then A Kadir Jasin said he had taken the matter up with Mahathir who told him to listen to Daim. The news was negative. I was moved out to editorial writing at New Straits Times. I left for stockbroking research, beginning a 10-year sojourn from journalism.
Daim Returns
Daim returned to government to help Mahathir navigate out of the 1997/98 Asian financial crisis and the sacking of Anwar as finance minister and from the cabinet and his subsequent arrest in 1998 after the imposition of capital controls.
Initially Daim headed the powerful National Economic Action Council or NEAC before becoming finance minister again in 1999. As NEAC chief, he invited all suggestions for turning the economy around, giving meetings to individuals and groups who were willing to spend time talking to him.
During this period, I had left stockbroking in the wake of the Asian financial crisis and worked as a consultant with an image management company focused on TV called Bulletin International.
I was part of a small team which pitched for a public relations job for the NEAC/country with Daim. If he recognised me he showed no signs but he and the others were totally attentive and responsive to us. We got the job which entailed putting together positive TV newsreels about the country for positioning on regional TV networks.
What struck me then was that he was a listener and was open to any ideas which may help the country. His curiosity was plain as was his desire to learn from other people outside his area of expertise.
He listened, and probed gently
He did not put us down, he was not aggressive, he listened and he probed, gently. I heard subsequent stories of him using professionals to conduct surveys on the ground to gauge public opinion on different matters. Daim sought and listened to views.
The NEAC made an enormous contribution to the turnaround of the country from the Asian financial crisis and the successful implementation of capital controls. However Daim came in for extensive criticism over the way he handled shares stuck in Singapore’s over-the-counter market for Malaysian shares where a crony was involved.
Daim left government again in 2001, two years before Mahathir stepped down as PM in 2003, for the private sector but he appeared to focus on personal interests and winding down his business until talk of him engaged in funding for political parties emerged in 2014. I had returned to journalism for some 14 years, working at The Edge, The Star and starting a new business portal KINIBIZ in joint venture with Malaysiakini.
My colleague at KINIBIZ where I was founding editor, Khairie Hisyam, one of the best young writers I have had the pleasure of working with, wrote a series of articles on Daim, which remains today, 11 years after it was written, among the definitive pieces on Daim. I was there at the interview too, the last time I would see him face- to face.
The series was titled Daim, The Godfather of Corporate Malaysia and can be accessed here.
It culminated in the four part interview with Daim arranged by Khairie at which I was present too. It was revealing, wide-ranging. The bottom line: no he was not returning, and he was firmly in retirement and focused on charity.
But he did return despite what he said about Anwar at the interview – “…Obviously Anwar was at a loss (then in 1993). I don’t think he knows the stock market. Can’t blame him as he did not have any work experience other than ABIM (Angkatan Belia Islam Malaysia)”.
Daim returns, yet again
He said in June 2018, barely two weeks after Pakatan Harapan won the 2018 elections, that he had met Anwar several times while the latter was in prison to discuss the toppling of Najib’s government.
“We have always been friends but politics is different. Anwar and I have known each other for a long time. We discussed how to topple the previous government and with the support of the rakyat, we succeeded. We must stay united and deliver our promises to them,” he said.
That proved beyond any doubt the old adage that there are no permanent enemies in politics. Anwar’s Harapan had teamed up with Mahathir, his oppressor previously,all candidates contesting under the Harapan banner, to decisively rout Umno, its first defeat at the general elections ever.
Things soured again. Mahathir became prime minister, under an arrangement which was deemed to be interim until Anwar was pardoned. But Mahathir reneged on the deal and wanted to be PM indefinitely and acted accordingly, bringing in Daim to head the Council of Eminent Persons (CEP) which had more power than the cabinet in which Anwar was excluded.
A great failure
This was Daim’s great failure in public office. Instead of bringing reform, he curbed it and suppressed information from committees formed, including one for judicial reform, its findings not even made public until today.
He took revenge on Khazanah Nasional Bhd, the organisation that took over assets of some of Daim’s chosen corporate chieftains in a rescue attempt . He refused to engage them, resulting in a mass resignation of the entire board.
He reduced to tears other corporate chiefs who were questioned inquisition-like at meetings with the CEP and its officials. Other CEP members privately said that Daim was not consulting with them but was on a romp of his own.
Perhaps he was bitter with the thought that his aim of creating a bumiputera billionaire class went up in flames of the fire caused by the Asian financial crisis and the restructuring process that it entailed.
His high-flying proteges like Halim Saad, Tajudin Ramli, Wan Azmi Wan Hamzah, Samsudin Abu Hassan, Amin Shah Omar Shah, Ting Pek Khiing and others all went down after the financial crisis.
When he was given the last opportunity to help put things right in 2018, he failed. But the ultimate failure was that he will always be thought of as a proxy for what Mahathir wanted, even though some of his achievements belonged to him.
Towards his last days, he was an enemy again with Anwar, showing that there are no permanent friends in politics, suffering for it through court actions although eventually no solid evidence was adduced against him.
He was complex, complicated and contradictory but he wielded extraordinary power sometimes well and sometimes questionably. His passing marks the beginning of the end of an era in Malaysian politics and economics.
P Gunasegaram says at some time the old will make way for the new whether they want to or not.
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