Mahathir on ASEAN center stage

Mahathir on ASEAN center stage

By Roberto Coloma

SINGAPORE (AFP): The severe crisis in Indonesia has eroded
President Soeharto's standing as the region's elder statesman,
allowing Malaysian Premier Mahathir Mohamad to fill the void,
diplomats and analysts say.

"Overwhelmed by its own internal problems, Indonesia is no
longer in a position to play its traditional leadership role in
Southeast Asia," the Political and Economic Risk Consultancy Ltd.
(PERC) said in a report.

"Indeed, with its economic situation deteriorating almost by
the day, Indonesia is in danger of becoming a regional liability
rather than an asset," added the Hong Kong-based group, which
analyzes Asian trends.

Mahathir completed a Southeast Asian tour in Singapore over
the weekend after visiting Indonesia, Thailand and the
Philippines to sell his idea of using their battered currencies
in regional trade instead of the U.S. dollar.

Stressing the need for a "united front" in ASEAN, whose major
currencies have fallen sharply against the dollar, he said he had
mustered support for the trading scheme, which is to be refined
by regional central bank governors.

The mission came two months after Mahathir, 72, hosted a
summit of the Association of Southeast Asian Nations (ASEAN)
which Soeharto, 76, missed due to a still undisclosed health
problem at the time.

With 200 million people in a vast archipelago strung across
the region, Indonesia has been the big brother within ASEAN since
it was founded 30 years ago. Jakarta has been a stabilizing
force, serving as a mediator in solving the Cambodian conflict
and easing tensions over the disputed Spratly islands.

But as Soeharto seeks a seventh five-year term in March
elections after being in power since 1966, he is facing his worst
crisis since coming to power and Indonesia is sliding
irreversibly into a recession despite a US$40-billion
international bailout.

Timely reforms have allowed Malaysia to avoid seeking a
rescue, and Mahathir has joined a procession of Southeast Asian
leaders who have visited Soeharto to offer their support.

"We can't let Indonesia go under. The only conceivable
scenario worse than turmoil in Indonesia would be turmoil in
China," said an ASEAN diplomat.

PERC said, "widespread social unrest in Indonesia could result
in thousands of economic refugees heading to Malaysia and
Singapore in search of a better life."

Soeharto's image was first hurt last year when pollution from
forest fires in Indonesia generated severe smoky haze which made
life difficult for millions in the region and triggered unusually
open and bitter criticism of Indonesia.

PERC said because of the haze problem -- for which Soeharto
had to apologize publicly -- "Indonesia's moral claim to regional
leadership was seriously questioned."

"As Indonesia sinks deeper into an economic and political
quagmire, Malaysia seems well positioned to take over Jakarta's
role as the effective leader of ASEAN, helping the countries of
the region come up with solutions to their common economic
problems," it said.

Mahathir came under severe criticism last year and was
labeled a "loose cannon" after calling for curbs on currency
trading. But since hosting the ASEAN summit missed by Soeharto in
December, Mahathir has toned down his rhetoric and taken a more
pro-active role.

"I would say Mahathir's status has edged upward, especially
when he held his tongue during the summit," the ASEAN diplomat
said.

He said because of its largely ethnic Chinese population,
Singapore cannot seize leadership in ASEAN despite its financial
muscle.

The two other large countries in Southeast Asia, Thailand and
the Philippines, cannot assume the role because their leaders do
not stay in office long enough, he said. Mahathir has been in
power since 1981 and from all indications intends to stay at the
helm.

"Malaysians in general are also probably more attuned to the
need for regional solutions to regional problems than the
citizens of any other country in Asia," PERC said.