After an unexpectedly harsh browbeating by Dr Mahathir Mohamad at the opening of the United Malays National Organisation (UMNO) annual assembly, party members complained the prime minister's closing address a few days later was more in keeping with a leader unwilling to quit. The improvised closing speech was a modest 90 minutes and raked over old themes first raised in his 1970 book, 'The Malay Dilemma'.

Dr Mahathir, the UMNO president, again berated the majority Malay community for its socio-economic shortcomings and lamented how recent Malay disunity has threatened UMNO's political supremacy. The solution to UMNO's woes, Dr Mahathir advised, was to "love the president, obey him".

The Malays are lazy, Malaysia's prime minister accused, and have wasted the opportunities given to them by the government; the Islamist opposition party Pas, on the other hand, misuses religion and cheats the Malays. And of course, the foreign media lies and the West hates Malaysia for its maverick defence of the developing world. Paradoxically, Dr Mahathir's calls for the Malays to "put in enough effort" to build a burgeoning middle-class came with threats to the community's "special privileges" and subsidies should UMNO lose power.

By the time Dr Mahathir regaled his party faithful with spoken parodies of Australian English and other barbs for various enemies, the 2000 delegates were on their feet applauding. It was a rousing close to the annual party
convention increasingly stuck, said one provincial UMNO delegate, "in the old man's groove". For most part, party delegates have been glum about UMNO's hold on power beyond the 2004 general elections. Dr Mahathir had not helped matters when he bluntly reminded delegates the slim margins in many parliamentary seats held by UMNO and its partners in the ruling Barisan Nasional coalition, and how the opposition winning a majority was "no longer that difficult".

Dr Mahathir celebrates 20 years in power next month (July 16). But even senior leaders and cabinet ministers in the dominant UMNO party admit that the succession plan for Dr Mahathir is still uncertain. After the departure
of three previous deputies, including most spectacularly the now-imprisoned Anwar Ibrahim, UMNO members are wary of anointing the present deputy prime minister Abdullah Badawi as Dr Mahathir's successor as prime minister and UMNO leader. One member of UMNO's Supreme Council conceded that Dr Mahathir remains the "best leader we have" to lead the fight against an increasingly popular opposition alliance led by the Islamist Pas. Another veteran member said the deputy prime minister was not "ready" for the top job, and may be subject to challenges from better-funded party rivals.

Despite this, there are no excuses not to institute fundamental changes in the party, said the outspoken Supreme Council member and former minister Shahrir Samad. Applauding Dr Mahathir for finally admitting that UMNO has serious problems of corruption, Mr Shahrir said changes had to start at the top: "It must change itself and start doing the right thing. It's very important that government funds are well-utilised and well-allocated... the right people get to do the jobs and not just given (out) on the basis of favouritism and so on."

But Dr Mahathir was resolute in his opening speech to delegates, slamming the reform, or 'reformasi', tendency, where "excessive" democracy and street protests had to be stopped. His point was reinforced outside the convention with vivid posters of property damage and human victims in the aftermath of such demonstrations in Indonesia and elsewhere.

Not far from many delegates' minds as the convention drew to a close were two unresolved issues. One was the sudden resignation last month of finance minister and UMNO treasurer Daim Zainuddin, Dr Mahathir's long-time confidant. There was hardly a mention of Mr Daim's departure and, as a result, much speculation about an increasingly isolated leader and the danger this poses to the party. The other issue remains the seeming inability of UMNO's leaders in mending the fundamental split in the Malay community, sparked off by the sacking and jailing in 1998 of UMNO's former deputy leader Anwar Ibrahim. Although Mr Anwar is in jail, younger voters find him and his cause appealing, and many of them make up the 650,000 new voters registered for the next general elections due by 2004.

Changes are already afoot in the opposition alliance, as two of the four parties voted for a historic merger last weekend, a day after UMNO's meeting. The National Justice Party, led by Anwar Ibrahim's wife Dr Wan Azizah Ismail, voted to approve a merger of the party with the smaller but much older Malaysian People's Party (PRM). Popularly known as Keadilan, the party's icon and defacto leader is the imprisoned Mr Anwar. Although Keadilan's Muslim youth faction, amongst others, had raised objections against the merger because of PRM's "unIslamic, socialist" origins, Mr Anwar was reportedly behind the merger proposal.

"Both parties are Malay-based and multi-racial and represent a new kind of politics," said Dr Wan Azizah, "where racial sentiments will be minimised." The PRM youth leader Latheefa Koya was more bullish: "This will eliminate UMNO, Barisan Nasional and its racist ideology in time to come." While Dr Mahathir has to rebuild his credentials with the Malay electorate as a defender of ethnic Malay rights and privileges, the opposition Islamist party Pas on the other hand hopes to impress the ethnic Chinese minority by appointing to its central committee one Chinese member.

Opposition leader and Pas president Fadzil Noor knows, like Dr Mahathir, how important a minority community might be in close electoral contest. Capturing the loyalties of the Chinese electorate is proving elusive for Dr Mahathir, and his scolding of community organisations such as Suqiu and Chinese education groups has not been well-received. The recent controversy over the takeover of a large Chinese media company by Dr Mahathir's coalition partner, the Malaysian Chinese Association (MCA), has also angered the community, and rival factions in the MCA and others have questioned the accountability and
transparency of the buyout.

But it has become unclear if traditional, racially-based politics can still deliver the electoral results, or whether the "new kind of politics" promised by Dr Wan Azizah will come to pass. In a week when both views have been debated and decided upon, the only certainty is Dr Mahathir remaining in office beyond his 20th year. As one newspaper editor wryly noted outside the UMNO convention, these developments signal "business as usual but now it's bad for business".

Kean Wong
The Economist