THE MALAYSIAN QUESTION

November 17, 1998
		As the members of the Asian-Pacific Economic Council (APEC) gather in Malaysia for their annual meeting, Vice President Al Gore openly criticized the host nation for its treatment of political opponents. Following a background report, Margaret Warner discusses the situation.

Nov. 17, 1998: A discussion on the diplomatic jousting between the U.S. and Malaysia. Nov. 16, 1998: A look at the flow of money in and out of Asia. Oct. 9, 1998: A discussion on the world economic crisis. Oct. 8, 1998: The president of the World Bank discusses the world financil crisis. July 24, 1998: Keizo Obuchi becomes Japan's new prime minister. May 21, 1998: B.J. Habibie becomes Indonesia's new president. Feb. 3, 1998: Exploring the impact of Asia's economic woes. Jan. 19, 1998: A discussion on the IMF's handling of Asia's economic crisis. Nov. 26, 1997: APEC's annual conference concludes. Nov. 25, 1997: Asia's leaders look for answers at the APEC annual conference. Browse the NewsHour's coverage of Asia and Economic issues     Prime Minister of Malaysia Asia-Pacific Economic Cooperation International Mondetary Fund	JIM LEHRER: And now the controversy in and over the Asian nation of Malaysia. We start with some background from Spencer Michels.
	Gore speaks out
	SPENCER MICHELS: Pinch-hitting for President Clinton, Vice President Al Gore leveled a carefully-planned burst of diplomatic candor against the country he was visiting -Malaysia -- which is playing host to the Asian economic summit. Gore stepped straight into an internal political dispute between the Malaysian government and the pro-reform, democratic-minded opposition. At a dinner speech to business leaders yesterday, Gore saluted that opposition. VICE PRESIDENT GORE: Democracy confers a stamp of legitimacy that reforms must have in order to be effective. And so, among nations suffering economic crises, we continue to hear calls for democracy and reform in many languages, people's power, doi moi, reformatsi. We hear them today, right here, right now, among the brave people of Malaysia. SPENCER MICHELS: His comments angered the Malaysian government, which accused the U.S. of inciting lawlessness. RAFIDAH AZIZ, Trade Minister of Malaysia: We always expect lectures from people. We're so used to it - but never such disgusting, rude intervention into our local affairs. I mean, somebody should have told him, that's totally bad manners. SPENCER MICHELS: Gore's remarks were not the only show of support for the opposition. They followed a meeting of Secretary of State Madeline Albright with the wife of a political rival of Malaysia's prime minister, who was sent to prison by the country's leader. But American support for the opposition today brought criticism from other Asian officials from Singapore to New Zealand. Even though they have been critical of Prime Minister Mahathir Mohammed , they said the American vice president should not have waded into internal Malaysian politics at an international economic summit. On the streets of Kuala Lumpur, the Malaysian capital, small groups of demonstrators continued their protests against the government and cheered Gore's show of support.
	A government in trouble
	Since the 1960s, Malaysia --a nation of 22 million people -- has exemplified the Asian model of economic growth and authoritarian political rule, but now, the economy is in trouble and Prime Minister Mahathir -- in power for 17 years -- is facing open opposition. On September 1st, Mahathir imposed an economic program of currency controls, at the borders and airports, and withdrew the Malaysian ringit from international trading. He also cut interest rates and instructed banks to pump money into the economy. He said he was defending his country. MAHATHIR MOHAMAD, Prime Minister, Malaysia: We are going to recover it all. We have to regain control over our own economy. And there are two things that we need to gain control over, and that is the exchange rate involving the ringit and secondly, the stock market. SPENCER MICHELS: On September 2nd, Mahathir fired his deputy, Anwar Ibrahim, who had favored austerity programs backed by the International Monetary Fund. And on September 10th, Anwar was jailed. Two weeks ago his trial began. The official charges were violating the country's laws against homosexuality, charges Anwar has denied in court proceedings. His supporters say the real issues are economic strategy and political rivalry. Malaysia's new government policies are designed to protect Malaysian businesses from the turbulence that has swept over Asia and business leaders have supported Mahathir. The recession in Malaysia is not as deep as in Indonesia or Thailand, both under IMF bailout restrictions. But now an international debate has begun on whether Mahathir's political and economic medicine will immunize his country from the Asian flu, a disease which has toppled other Asian governments.