Malaysia's finances have been in a mess since one Tun Daim Zainuddin became finance minister when Dato' Seri Mahathir Mohamed became prime minister in 1981. He made it an adjunct to his corporate empire while impressing upon the country and, for a while, the prime minister himself, it could not be in better hands. Tun Daim made certain no one could disturb the cosy arrangements in place in the finance ministry and economic policy via the Economic Planning Unit of the Prime Minister's department -- he was also minister of economic policy -- and it enabled his cronies to get businesses and contracts without the world knowing anything about it. When the newly appointed deputy prime minister, Dato' Seri Anwar Ibrahim, wanted the finance ministry and got it, that chain of events led him to his lonely cell in Sungei Buloh prison. He questioned, wanted answers, changed what he could. This made one short man frothing in the mouth.

Tun Daim was UMNO treasurer as well, and in control of UMNO's billion-ringgit investments. At least that was what it was worth at one time. Not any more. He ran it, as the country's finances, as his fief, answerable to none, stonewalling every query and assuring repeatedly all was well when it was not. But it is not in human nature to not take advantage when no one questions or oversees. Probity and morality comes only when retribution is swift. Which is why there is more respect for the law in Singapore than in Malaysia. Here we make tougher laws when we cannot, or do not want to, enforce what we have, believing the threat is more fearsome than a spell in jail or the humiliation of an arrest. So there is, if word of mouth is right, one murder a day, police investigations dry up after the initial heat, and now ignored altogether by the newspapers and media. Everything has a price. And the most disturbing crimes can be privately settled if the right consideration changes hand. It reflects a larger malaise.

So, when UMNO demanded from Tun Daim six months ago an account of its finances, the UMNO treasurer took leave for two months as finance minister as well, promising it then. UMNO and the country still waits in hope. At the end of his sabbatical, during which he turned up regularly at his office at the Khazanah, he resigned from both. It was his way of telling UMNO and the country that since he is disbelieved, he could not continue. And as punishment, he would not give the accounts either. The authorities would have deregistered any political party but UMNO, and its office bearers would have joined Dato' Seri Anwar Ibrahim a long time ago. But what is allowed Zeus is disallowed the cow.

Tun Daim looks upon it as an insult and his reputation besmirched, for which UMNO and country must pay. Meanwhile, the Prime Minister takes over the finance ministry and UMNO finances, runs its part time, has little or no time to address the woes of both, and, as far as I can gather, assidously denies contracts to cronies of those he does not like than address more pressing issues of the day. And Dr Mahathir is in a spot to explain how almost every privatisation is given out to a group that eventually led to Tun Daim. And every one is a failure

He wants a finance minister he could trust and with no political ambition. He should not aim to replace him before he is ready to call it a day, perhaps ten years down the road. He would not make the mistake he made with Dato' Seri Anwar. Nor does he want an elected MP. He wants a man with no political base. UMNO cannot control its anger over it. He has ignored elected MPs and preferred men from the Senate in his recent cabinet and government appointments.

He has two men in mind. UMNO Supreme Council rejected one and the other is now chairman of MAS. They do not have a political base, one a former civil servant and the other a banker. One became Bank Negara governor only to be removed when he could not balance the conflicting demands of the prime minister and the finance minister. The other attracted national attention when he lost the country about RM31 billion, the final tally, in ill-advised currency speculation a decade ago. One could not explain to anti-corruption inspectors the RM100,000 in an enevelope in his table drawer in his office. Rumours now persist he does not want a finance minister, only a finance minister.

It is not competence he seeks. Malaysia's finances are ready for a pummelling. The statistics do not suggest it. Malaysian statistics are in fine shape. Looking at it suggests a powerful mini powerhouse. Forget that for a moment, and look about you and you get a different picture. There is no leadership, not just in managing the economy and finances. We correct policies by announcing changes on the cuff, with no intention it would be carried out nor that it is thought through. Nothing in the press and media suggests that announced policies are implemented. We announce projects in the billions to tell the world we do well, but are these carried out? Do we have the money to pay for them? Is Parliament privy to these projects? Where does the money come from?

If Malaysia does not fine tune its fiscal and financial policies with the toughness and foresight it demands, how could she withstand the pressures that must now come sooner than later? We are told ad nauseum our finances could not be better. But if the Japanese yen strengthened another ten per cent against the dollar, Malaysia's fixed exchanged parity to the US dollar at RM3.80 cannot sustain, however strong our economy and finances, with devaluation then the only answer and throw everything out of gear. As in Argentina. The fixed exchange parity is defended to show how stupid the IMF and World Bank is, and tell the world how Malaysia survives by defying its dictates.

But that did not precede a rigorous self-examination to fine-tune matters so the regimen could work. The large corporate foreign exchange debt is uncontrollable, much of that in the Labuan branches of Malaysian banks. The government promises crony companies and business empires it would rescue them from mismanaged and unrepayable debt, often allowing them to continue running their empires after their debt is written off. There is only one requirement: he companies must be run by cronies. No one else is eligible. It is not a precipe for sound fiscal and economic policy. When this is dealt with not with fiscal toughness and political savvy, the more so.

Malaysia's finance ministry cannot, should not, be run on auto pilot. But it is, and for the benefit of individuals, not the country. Disaster beckons, and it needs but a slight misconnection somewhere in the world, like a revaluation of the Japanese yen against the US dollar, for that. But the new finance minister would not be allowed to address that, and sort out the hidden mess Malaysia is in. A finance minister with an independent streak is disastrous for Dr Mahathir's and UMNO's political health. Many names are suggested, none from amongst elected members of Parliament, and all are rejected for one reason or another. But he must first decide if his future is more important that the country.

I was told -- which I could not yet confirm -- the MP for Merbok and the UMNO treasurer for Merbok flew recently separately to Tokyo to negotiate better rates for Petronas for its natural gas sales. The MP is, of course, Tun Daim. The other man is now tipped to be finance minister. A man the Prime Minister can trust absolutely. Who is he? I shall not tell you. Not even if a thousand screaming and angry Tan Sri Vincent Tans and Tan Sri Dr Ting Pek Khiings breathe down my neck for billions of ringgit I do not have. But here is a clue. He was once UMNO youth treasurer. He is a bin Mahathir, a tribe the Prime Minister trusts absolutely. He is looked upon as a potential UMNO treasurer. He is a member of UMNO Merbok division. He is not a MP. And it is easier for the Prime Minister to convince UMNO that he is a better choice than in the two men he had earlier in mind. But a nagging doubt remains: Is this the man we need right now overseeing the country's finances?

M.G.G. Pillai
pillai@mgg.pc.my