Anwar's Interview in Business World India: You Cannot Treat India as a Supplement to China

Malaysia's former Deputy Prime Minister Anwar Ibrahim is on the comeback trail. He is preparing for elections in 2009 by crisscrossing his country to bolster the ranks of his Keadilan Party. But Ibrahim suspects that Prime Minister Abdullah Ahmad Badawi may advance elections to 2008 to keep him out. He cannot hold public office until June next year because of a court order. He spoke with BW's Dinesh Narayanan while on a private visit to India recently.

Excerpts:

Business World: How smooth do you think your comeback will be?

Anwar: It is not easy. The system is not free. Elections are not fair. And there is no free media. Judiciary is not independent. How do you vote for the democratic process to change? But I think we can (come back to power).

Businss World: Do you believe your party has a base big enough to get you elected?

Anwar: Yes. But the media is not portraying it that way. I spend a lot of time -- six days a week -- in the districts. I go from village to village, district to district. I am quite optimistic. It is not going to be easy when you are dealing with politicians with billions of dollars and the entire machinery of the media at their disposal. But I think we will make a major impact.

Business World: You were identified with western institutions such as the World Bank and the IMF in the 1990s. Do you believe that the policies you followed then are valid now, especially since the two institutions' policy prescriptions for developing countries have been drawing a lot of flak?

Anwar: It depends on who you talk to. Mahathir told Muslims that I am a Jewish agent and to the Americans that I am a Muslim extremist. I cannot be both. Now, the son-in-law of the prime minister calls me a Jewish agent as well as an American agent, a traitor to the Malays, and that I am appeasing both Indian and Chinese interests. So, he said he will hound me. I rebutted with an Elvis Presley song, 'You ain't nothing but a hound dog'.
Factually, I was the chairman of the development committee of the World Bank and the IMF. I was instrumental in the regime of James Wolfensohn and Gordon Brown in the debt conciliation programme for highly indebted countries. When I was the finance minister, I had publicly said in Jakarta that when disbursing funds, we couldn't impose conditionalities that cause hardships to people. In 1991, we had a deficit budget ; in 1992, a balanced budget and; in 1993 a surplus one. The moment we became surplus, I ceased taking funding from the bank. It is on record. By 1998, I was in jail and, in 1999, Mahathir went back to the bank for funds. But publicly, he is anti-World Bank and I am pro-World Bank. It is not correct to say that I subscribed to the IMF and the World Bank policies. What did I subscribe to? Governance, yes. Anti-corruption laws, yes. Actually, I used the opportunity to tighten the screws on governance, policies, open tenders, and disciplining the banks. What's wrong with that? Can only the IMF talk about anti-corruption? Why can't we talk about anti-corruption?

Business World: What would be your economic agenda if you come back to power?

Anwar: I would strongly pursue market economy, market-friendly policies. No question about that. I would tackle issues such as poverty and employment through public education and public housing, which are very critical. Because I see that market-friendly government policies tend to neglect or defer the social agenda. I think they should be together. Malaysia has lost its competitiveness -- from No 17 in the 1990s to 50 now. We have lost FDI -- from No 1 in Asean to No 5. I would also change the obsolete policy of favouring the Malays. Because, on the pretext of helping the Malays, what they did was to enrich their cronies. Millions of privatisation contracts went to the prime minister's cronies. Abdullah gave a 3 billion-ringitt Petronas contract to his son. Najib took half a billion to give a contract to somebody else and millions to buy Sukhoi jets from Russia. They call it commission, legitimate commission, I call it corruption.

Business World: Where will you find money to fund your policies? Public education and housing will cost a lot.

Anwar: If you contain the wastage through corruption in mega projects, you can raise a few billion. If you take the 3 billion that Abdullah gave his son and the others, you save a few billions more. The profit of Petronas alone is 70 billion ringgits. Let's say, tomorrow, we reduce petroleum prices and its revenues become 60 billion. If we spend 10 billion on poverty alleviation and another 10 billion on education, we still have an excess of 30 (sic) billion. That is just Petronas alone. Malaysia is not a poor country.

Business World: In the context of Asean and South Asian politics, what will be your approach to other countries, especially China and India?

Anwar: First, I am a firm believer in increasing collaboration within Asean. Any difficulty in the coalition will not be in the interest of Malaysians and Singaporeans. Our development in the south will depend on the confidence that Singapore has. Vis-à-vis India, it is very important. I think if we look forward to an Asian summit, there is no reason why India should not be there. Not because I have a bias towards India but because it is part of Asia. It is an important economy. And it has a democratic process. We should continue the advanced relations with China, but you can't treat India as a supplement. It should be part of the core.

Business World: Do you share Japanese premier Shinzo Abe's vision of an 'arc of freedom and prosperity across Asia and the Pacific'?

Anwar: Yes, I think it comes under the Asian formation. He just used a different term.

Business World: But the way he said it, I think the arc stopped short of China.

Anwar: Yes, that's true. He did not actually spell it out. I was looking into the subtext. It was not really spelt out. His was a clever sort of play on words. I don't think it makes sense. There is no way you can ignore China. Mahathir took the other extreme -- China included and India on the periphery. It doesn't make sense. If there can be a NAFTA and an EU, why can't we have an Asian coalition?

Business World: So, you favour free trade within Asia?

Anwar: Yes. I said publicly during the East Asian summit in Kuala Lumpur that we should not be tied down by the obsolete thinking of Mahathir and should call it an Asian summit. Even Australia and New Zealand are part of Asia. They are whites, all right. But as much as you don't want Americans to be racist, you cannot be perceived as racist too. But the important thing is the Indian role. I think it is not only purely economic but also geopolitical considerations.

Business World: What role do you see for India?

Anwar: In this region, India is a strong democracy and a strong economy. I am quite optimistic about it.

Businesss World: But will other Asian countries accept India in a leadership position?

Anwar: No. We don't call it an Indian leadership or Chinese leadership. It is an Asian grouping in which we have China, India, Japan, and Asean. There would be a balance.

Business World: Are you for a common Asian currency?

Anwar: It will take time. I don't subscribe to a purely political prescription for an economic problem. It does not make economic sense now. But ideally, yes.
I am told that China is trying to get the academia in Malaysia to debate accepting yuan as the common currency. Yes, there is some debate. But mostly because many of these academics do what the government asks them to do.

Business World: Is it gaining currency?

Anwar: I don't think so, except with the government academics.