Malaysian prime minister Dr Mahathir Mohamad has presided over a transformation of his country. As Asia’s longest-serving head of government, in power for more than two decades, the prime minister has introduced and implemented a policy framework designed to propel his country into a developed society. He encourages foreign investment, especially in the high-tech arena, and has recently launched an initiative to increase fluency in English among students to raise the competitiveness of Malaysia’s future workforce.

His efforts have led to a first-class nationwide transport and communications infrastructure, and an increased investment by foreigners. On the political level, the prime minister’s main preoccupation has been the opposition Islamist PAS party (Parti Islam SeMalaysia).

Dr Mahathir has repeatedly voiced concern about the extremist policies he claims it pursues. The prime minister is not without his critics. Market participants complained bitterly when, in the east Asian financial crisis of 1997/1998, he pegged the Malaysian ringgit to the dollar and instituted stringent capital controls. Internationally, his reputation has been tarnished by charges that his heavy-handed political methods ensure the continued domination of his UNMO party.

At home, he is accused of uneven development that has left certain segments of society behind. And the prime minister has himself admitted that his government’s affirmative action programme for the majority ethnic Malay population – the bumiputra policy – has not worked as initially hoped. Dr Mahathir spoke with Andrew Cohen last year in his office in the newly constructed government complex at Putrajaya, a massive project he has promoted south of the centre of Kuala Lumpur.

GLOBAL AGENDA You have recently bemoaned Malaysia’s policy of affirmative action – the bumiputra policy – saying it has failed, after being in effect for decades, to inspire Malays to be enterprising, hard-working and independent. How do you get Malaysia’s ethnic majority more economically engaged?

MAHATHIR MOHAMAD Affirmative action has not achieved the targeted objective, but that does not mean that affirmative action is in itself wrong. It is the right thing as long as one accepts that some people are bound to become complacent because they are being discriminated in favour of others. Unfortunately, the numbers who are complacent far outnumber those who have made progress.

But had there been no affirmative action the situation today would have be very bad indeed. Thanks to affirmative action there were no racial riots between Malays and Chinese in Malaysia during the currency crisis of 1997/98 because affirmative action has partially corrected the economic imbalance between them. But affirmative action should have achieved much more than that. The important thing now is to explain further why there is affirmative action.

GA Will a dismantling of affirmative action threaten the social stability of Malaysia’s multi-ethnic society?

MM We have not yet achieved the objective. So if affirmative action is terminated now, then the situation might worsen and it might cause instability.

GA So affirmative action will remain in place?

MM It will be in place, but we will seek ways to make it more effective.

GA What is the ultimate goal to be achieved so that affirmative action can be dismantled?

MM It will disappear when the indigenous people are capable of competing with the other races.

GA Are you confident that that will happen?

MM That will happen one day, yes.

GA You have implied that the Islamic opposition – Parti Islam SeMalaysia (PAS) – is a threat to democracy. At the same time, you have said that democracy cannot be used to destroy democracy. Should PAS, therefore, be kept out of national power at all costs?

MM The problem with this group is that it is not Islamic at all. It is merely hiding behind the religion and constantly misinterpreting it so as to favour their views. Since their party is based on religion, the wrong stance on our part would give them a lot of room for expansion. In a democracy, whether you win or lose depends on majorities. And it is possible that by making people quite fanatical about certain things – not just religion, even ideology – one can create majority support.

GA But are you willing to resort to undemocratic means to ensure that the Islamic opposition stays out of power?

MM We feel that the best way is not to use strong-arm measures. Rather, we would try to counter the misinformation that is being spread about Islam by these people. We think we can do it.

GA Critics say you have used the events since September 11, 2001 as a pretext to suppress political opposition. How do you respond to this criticism?

MM We had been taking action against the al-Qaeda group and another group called the Al-Ma’Unah (Brotherhood of Inner Power) long before September 11 and we would have continued anyhow. It is in the interests of our country that we put an end to any threat of violence or the use of violence to overthrow the government. The opposition party can use their misinformation in order to gain support. But if they should resort to violent tactics to try and overthrow the government by force of arms, we’ll act against them. So far, although those people who want to use violence to overthrow the government may or may not come from the opposition party, it would seem that they act on their own. We cannot yet link this violent group with the opposition party. We took action against those who are willing to resort to violence long before September 11.

Maybe September 11 was fortuitous, but we didn’t depend on September 11 at all. We would have taken action even if the world were to condemn us.

GA What do you mean when you say that September 11 was “fortuitous”?

MM Lots of people think that because of September 11 other countries have begun to understand why Malaysia has to be tough on violent opposition. Other countries are now taking the same measures. They are forced to accept that under certain circumstances they, too, must act in the same way that Malaysia acts.

GA You have said that Malaysia is not a liberal democracy. What kind of democracy is it?

MM Malaysia is a democracy in the sense that the voice of the majority counts. The most important thing about democracy is that the government is elected by a majority of the people. But there are other things that are added to democracy. Individual and minority rights can be taken to the point where individual rights and minority rights override the rights of the majority. For example, if minorities were to stage demonstrations every day, the livelihood of the majority would be threatened. In a liberal democracy we would be compelled to accept the right of the individual. Here we do not regard that as being a democratic right. We regard the rights of the majority as being as, if not more, important than the right of the minority and the individual. But, of course, that does not mean that the majority should oppress the minority to the extent that it becomes very unjust and unfair.

GA You have described Malaysia as a true “Islamic state”. What makes it so?

MM Because in Malaysia Muslims are free to practice their religion without hindrance. There is nothing to stop them from carrying out what is actually prescribed by the religion of Islam. The government is fair to all communities and other religions because that is also part of the teachings of Islam. In a Muslim state there must be justice and fair play – not only for the Muslims, but for everyone else. All these things make Malaysia the true Islamic state.

GA You have set a goal of transforming Malaysia into an industrialized country by 2020. Do you still expect this to be achieved?

MM Not a fully industrialized state. We are talking about a developed country and we always emphasize this: a developed country according to our own specification, our own definition.

GA And how would you define it?

MM Some countries are developed, but morally they have declined. They may be very rich, but they pander to material wealth in disregard for charity and concern for the poor. They are so obsessed by being free that they deny the freedom of others. They are in many senses very oppressive towards other countries and other peoples. That is not the kind of developed country we expect to be by the year 2020.

GA Would you name some of those countries that you do not aspire to emulate?

MM I won’t. [He laughs.]

GA When will the ringgit peg be lifted?

MM We have always said that the ringgit peg will stay for as long as it does not affect our economy adversely. Now, if our neighbours devalue by 20%, or revalue by 20%, and that value remains for a considerable length of time and affects our competitiveness, then we may consider changing the peg. But so far nothing like that has happened. And our ringgit peg has given us an advantage over all our competitors because people who do business in Malaysia know that they can expect to draw up a budget and at the end of the year they don’t have to take into consideration fluctuations in the value of the currency.

GA Do they need to worry about a reimposition of capital controls?

MM No, they don’t need to worry about that. Because we know that they have as much to lose if they do certain things that undermine the economy of this country. Besides, we are not too dependent on foreign investment in this country. Most of the investment comes from within the country.

GA Can you envisage a scenario now under which capital controls could be reintroduced?

MM No, I don’t think so. I don’t see anything. The last time it was actually started by the devaluation of our currency, following which the shares bought by foreigners were devalued. Out of fear that further devaluation of the shares would take place, they pulled out their investments, which, of course, caused a lot of problems for our economy.

GA What were the root causes of the events of September 11, 2001 and how can such things be prevented from happening again?

MM The root causes lie in the conflicts and the impressions by Muslims that they are being oppressed, particularly in Palestine. Of course, in other countries also they feel they are being oppressed – including in Chechnya, or in Kashmir.

Whether it is correct or not correct is irrelevant because it is their impression. And they feel that Palestinians in particular have been treated very unfairly. They are being killed, their land is being taken away from them. And generally for the last 50 years they have been living as refugees. And this creates a feeling – not only among the Palestinians, but among a lot of people sympathetic to the Palestinians – that they have to hit back in some way. Their choice is to resort to terror tactics. But what are their options? They cannot fight a conventional war against their oppressors.

GA Do you think that Muslims are, in general, mistreated?

MM I think so. And I think this impression is gaining rather than diminishing because since September 11 (Israeli prime minister) Ariel Sharon has gone all out to counter-terrorize terrorists, to increase acts of terror against the Palestinians.

GA How should Muslims best to respond to this?

MM Muslims should, of course, condemn terrorism because it is against the teachings of our religion. However, in the case of the Palestinians, we find it difficult to condemn them because we are

not in a position to go to war against Israel or other oppressors and the Palestinians are left to fight for themselves. They have no choice but to act the way they are acting.

GA Why isn’t economic integration among ASEAN (Association of South East Asian Nations) members progressing more swiftly?

MM We are competing economies. We are not at the same level of development. Obviously, the more developed members of ASEAN stand to gain more when integration or opening up of markets takes place. Some of the countries are rather apprehensive about what would happen to them if there is complete integration. Stronger ASEAN countries would dominate the group.

GA Is an EU-like organization feasible for southeast Asia or east Asia as a whole?

MM It is, but it will take many, many years.

GA Is it your hope that one day that will happen?

MM I hope so. You must remember that the European Union took more than 50 years [to be created]. And along the way there were people who stayed away and did not subscribe. Britain, for example, joined later. It refused to join the monetary union. And Britain is not a part of the whole financial system of Europe.

GA So their problems were and are the same as those you face in southeast Asia?

MM Right. In ASEAN countries at the moment any attempt to unionize would meet with greater resistance than within the EU.

GA Is Malaysia trying to usurp Singapore’s role as the dominant commercial hub in the region?

MM It is fair competition. There is no reason why Malaysia should not try to compete with Singapore in any field. We have a right to compete with Singapore as much as Singapore has a right to compete with Malaysia. In the past, they had an edge. But we built up our capacity, and now we are perhaps in a position to compete to a small extent.

GA But there seems to be an effort by Malaysia to go head-to-head with Singapore. You have been quoted as saying there was more than one way “to skin Singapore”. Is that what you would like to do?

MM First, I never said “to skin Singapore”. I said there are many ways to skin a cat, a common expression. We have had problems with Singapore. Singapore is a service centre, which makes use, perhaps, of Malaysia’s lack of efficiency to gain advantage for itself. In addition to that, we have some minor problems like water, where Singapore insists that an agreement that was drawn up in 1927 should continue for more than 100 years.

It is ridiculous that Singapore should buy Malaysian water at 3 sen (less than 1 US cent) for 1,000 gallons in 1927 and continue to buy at that same price today and in the future. Nothing that was sold at 3 sen in 1927 is sold at 3 sen today. We are asking for a revision.

But unfortunately the conditions drawn up by the British – at that time the British controlled both Singapore and (the neighbouring Malaysian state of) Johor – favour Singapore. No revision of rates can be made unless both sides agree. Singapore is hanging on to that because if they don’t agree, then we cannot implement any increase in the rate.

GA Do you anticipate that festering issues with Singapore – airspace, railway, water and territorial issues – will be finally settled or regulated before you leave office?

MM No, I don’t think so.

GA You have been in power for more than 21 years. Of what changes in Malaysia during this time are you most proud?

MM The ability or success in maintaining relative racial harmony, which was the result of the first prime minister. I have been able to continue with that. That is a very tough thing.

GA Do you have any regrets?

MM No regrets.

GA You have said, however, that if you could turn back the clock you’d wish to be an ordinary party member. Weren’t you happy as prime minister?

MM Well, at times I feel frustrated because I cannot change the mindset of my own people, the indigenous people of Malaysia.

GA Are you also tired?

MM I think I deserve to have a rest. I’m already 77 years old.

GA Have you been in power too long?

MM If I had been able to achieve my objectives earlier I would have stepped down earlier. But lots of things happen that prevent you from stepping down when you really want to step down.

GA Are you concerned you have become a crutch for Malaysia and Malaysians, who perhaps worry how they’ll be able to carry on without you?

MM I don’t think I’m a crutch. I know I belabour a lot of people whenever they fail or they don’t come up to my expectations. I say nasty words to people, so I don’t think they can depend on me as a crutch very much.

GA Will you retire from politics completely after stepping down as prime minister?

MM Not completely, because I have pledged that I will continue to support the party and ensure that succeeding governments will remain strong. I will go down and meet the people, and talk to them, and tell them why they should support the government.

GA Will that be in any official capacity?

MM No, it’s not necessary. I have sufficient standing in the party to be able to move around and meet party members without holding any position.

GA What is your definition of “good governance”?

MM The most important thing is to do things that are good for the people. Sometimes the stress is too much on how things are done – whether they conform to current styles, current ideas or not. But the most important thing are the results. You can be a democratic government [that] ends up an anarchy. On the other hand, you may have a system that might be slightly less than perfect, but the result is the wellbeing of the people, the wellbeing of the country – economic growth. That is far more important than being dogmatic about certain ideologies. I am not dogmatic. I am prepared to accept even Communist ideas if they serve us – which is why Malaysia has five-year plans.

GA Those are the principles that have guided you while in power?

MM Yes. We are pragmatic. We are very pragmatic. Of course, it’s not a case of the end justifies the means. The means must be fair also. But if we have to choose between two fair means, we will opt for the one that produces results.