Mahathir keeps old guard in new Cabinet

Mahathir keeps old guard in new Cabinet

KUALA LUMPUR (Reuters): Malaysian Prime Minister Mahathir
Mohamad on Friday retained the old guard and his market-savvy
finance minister in a new cabinet that was welcomed by markets.

In his first major political move since winning a Nov. 29
election, Mahathir opted for continuity, keeping most key
ministers in the same posts while filling empty junior positions
with young blood.

The 73-year-old leader kept Daim Zainuddin, architect of
Malaysia's controversial capital controls, as finance minister in
a signal to markets that economic policy would stay on track.

Deputy Prime Minister Abdullah Ahmad Badawi, Foreign Minister
Syed Hamid Albar, Trade Minister Rafidah Aziz, Transport Minister
Ling Liong Sik and Primary Industries Minister Lim Keng Yaik
retained their portfolios. Abdullah also kept the Home Ministry
portfolio.

A surprise omission from the cabinet line-up was Tengku
Razaleigh Hamzah, a former archrival of Mahathir's who had been
considered a potential successor to the prime minister.

Mahathir, whose 14-party coalition won a 10th consecutive
mandate in the election, had been widely rumored to be ready to
readmit Razaleigh to the cabinet inner circle. But Mahathir said
Razaleigh "did not fit with the criteria".

Najib Abdul Razak, who won his parliamentary seat by a razor-
thin margin, was shifted from education to defense in what was
seen as a demotion for one of Mahathir's potential successors.

The cabinet marked Mahathir's first move since the Islamic
opposition Parti Islam se-Malaysia (PAS) made electoral gains at
the expense of his United Malays National Organization (UMNO)
party in the Malay heartland in the north of Peninsular Malaysia.
Mahathir played down PAS's gains.

"This is not the first time UMNO had lost votes to PAS. The
split is not so much a split. It's all due to intra-party
rivalries, loyalty to personalities, rather than a party. Don't
read too much into this thing," he told a news conference.

Analysts highlighted Mahathir's decision to keep almost all of
the key players in the same posts, especially Daim, credited with
pulling the economy out of two recessions in 13 years.

"Coming out of a recession, Mahathir did not want to rock the
boat too much," Eddie Lee, regional economist at Vickers Ballas
in Singapore, told Reuters.

"For the present, Daim was seen as indispensable by the
alliance. Daim is expected to follow the same economic policies."

A regional economist at a foreign brokerage in Singapore said:
"To me, it's a sense of relief. Nobody has the stomach for a big
upheaval at this point. People want to see the country get down
to business."

One notable new face will be Hishamuddin Tun Hussein, named
youth and sports minister. Hishamuddin, 38, is the grandson of
UMNO's founder, son of a former prime minister, and one of the
country's fastest-rising political stars.

But the chairman of the opposition Democratic Action Party,
Lim Kit Siang, said "the new cabinet is most disappointing as it
does not impress Malaysians as a millennium cabinet but looks
very Jurassic".

Lim, who was opposition leader until he lost his seat in last
month's polls, said "many old, tired faces remain" and faulted
Mahathir for not "dropping political deadwoods".

The Kuala Lumpur Stock Exchange's 100-share index, which
gained in the morning on expectations of cabinet continuity,
retreated slightly after the line-up was announced as market
players pocketed profits.

But the index still closed higher at 743.6, up 0.88 percent or
6.47 points.

With the cabinet selected, Mahathir's UMNO now looks to crucial
leadership elections set for mid-2000.

Mahathir, who won an unprecedented fifth mandate in last
month's elections, said he would not run for a sixth term.

"By the next term I'll be very near 80 years old. I'll be
having a stiff neck, bad eyesight, and all that kind of things.
So this will be my last term," he said.

After announcing the cabinet on Friday, Mahathir lashed out at
his jailed former deputy Anwar Ibrahim and the foreign press.

Mahathir, who had been silent on the political situation since
his coalition won snap polls on Nov. 29, reverted to his
characteristic combative form at a news conference once he had
unveiled his new cabinet.

He first attacked the foreign press for failing to recognize
voters' loyalty to his coalition, which has won all 10 general
elections since independence in 1957.

"Of course, I don't expect the foreign press to ever
understand this. You have your own agenda, and you have
interfered in our campaigning by propping up people who have done
all kinds of funny things," he said.

Mahathir has often criticized the foreign media, saying it
favors Anwar, who was sacked in 1998 and later sentenced to six
years in jail for corruption. Anwar says he was the victim of a
plot to destroy his career.

On Anwar Mahathir said: "He creates loyalty to himself, not to
the party. That's why the moment he left the government he joined
the opposition. I've been sacked before from the party, but I've
never joined the opposition."

The 73-year-old prime minister said many people continued to
hold the government responsible for beating Anwar in detention
when the person responsible was the former police chief.

He said it was not true that Malaysians were denied full
political freedom. Many government critics say civil liberties in
the country have been curbed under Mahathir's 18-year rule.