Bank Negara started gambling on the FOREX market in the late 1980s. As early as 1989 the western media had already revealed that Bank Negara is the biggest FOREX speculator in the world but by then Bank Negara was already in trouble. In 1991, Daim resigned as Finance Minister and Anwar took over. Anwar’s job as Finance Minister was to cover Mahathir’s and Daim’s backs when all hell breaks loose. In September 1992, Soros attacked the FOREX market with US$8 billion in borrowed money and Bank Negara, which was already sinking, lost a total of US$10 billion while Soros made US$1.2 billion.
THE CORRIDORS OF POWER
Raja Petra Kamarudin
When Tun Daim Zainuddin resigned as Finance Minister in 1991 and Anwar Ibrahim was appointed to replace him, the talk around town at that time was that Daim and Tun Dr Mahathir Mohamad had quarrelled (which was why Daim resigned). And the reason for the quarrel, according to the talk in town, was because Daim, one of the three Umno trustees holding Umno’s assets and investments under trust, refused to hand back to Umno the RM60 billion he was holding through various proxies.
This book lists those who were proxies of Umno through Mahathir, Daim and Anwar
Anwar’s supporters saw his promotion to Finance Minister as a major career progression. Anwar was still just one of the three party Vice Presidents. If he wants to become the next Deputy Prime Minister, and later the Prime Minister, he needs to first take over as the Umno Deputy President. And as the new Finance Minister this would give him the platform to challenge Tun Ghafar Baba for the post of Umno Deputy President, and then move up to become the new Deputy Prime Minister.
Anwar’s ambition to become the next Prime Minister would then be one step closer.
Mahathir loyalists such as Sanusi Junid were not happy with this development. He even quipped, “Macam mana jadi Menteri Kewangan bila maths pun tak pass?” They knew it was dangerous to make Anwar the Finance Minister. As a ‘normal’ Vice President he can be kept in check. As the Finance Minister, however, Anwar would challenge Ghafar for the post of Deputy President and hence would become the Deputy Prime Minister as well. And as the Deputy Prime Minister cum Finance Minister, Anwar would be as powerful or even more powerful than the Prime Minister. And that would mean Mahathir’s days would be numbered.
Sanusi saw Anwar’s promotion to Finance Minister as dangerous because this would be a stepping stone to the post of Deputy President and, later, party President
True enough, two years later, in 1993, Anwar took on Ghafar and took over as Deputy President and Deputy Prime Minister. Hardly three years on and Anwar began to make his move on Mahathir as Sanusi had warned. But then this was a risk that Mahathir had to take because it was crucial that Anwar be made the Finance Minister before the huge Bank Negara FOREX losses becomes public knowledge.
The reason why in 1991 Mahathir had to replace Daim with Anwar is simple. Since the late 1980s Bank Negara had been playing the FOREX market and was losing its pants. It was only a matter of time before the world is going to find out. So, before it becomes public knowledge, it is better that Daim resigns and Anwar takes over. Anwar’s job as Finance Minister is to cover Mahathir’s and Daim’s back when the explosion happens — even lie if necessary (which Anwar did when he lied to Parliament in 1993 and 1994).
Today, for the first time, Malaysia Today reveals why Mahathir and Daim made Anwar the Finance Minister in 1991
No doubt it was dangerous to appoint such an ambitious person to the post of Finance Minister, especially someone like Anwar who is one of the three party Vice Presidents. Furthermore, Anwar does not have a background in finance and is not qualified to become the Finance Minister. Nevertheless, Anwar is very ambitious and he would do anything to earn the job of Finance Minister, even lie and cover Mahathir’s and Daim’s backs if need be.
In short, Mahathir and Daim needed someone to do the dirty work, clean up the shit, and hide the truth. And Anwar would do this because he was dying to become the Finance Minister, his stepping stone to take over as the new Deputy Prime Minister in 1993 and, later, the Prime Minister in 1997-1998. Mahathir knew this and he also knew he was playing with a pit viper. But at that time it was a necessary risk to take.
Daim deserted the sinking FOREX ship and handed over the job of Finance Minister to Anwar
In fact, in the beginning Mahathir was sceptical that making Anwar the Finance Minister was a wise decision. Even his most trusted loyalist, Sanusi, was against it. Daim, however, convinced Mahathir that they had no choice. They needed Anwar to help cover their backs and Anwar would do it because he wants the job and he would sell his own mother if need be.
I suppose this is a good lesson for Prime Minister Najib Tun Razak. Back in 2015 Mahathir had offered Najib a deal that would end the war and a truce could prevail. And the deal involved Najib resigning as the Finance Minister and Mukhriz would be appointed to replace him. Najib knew that this would be the stepping stone for Mukhriz to contest a Vice President’s post (which he did in 2013 and lost). And after that, say in 2018, he can go up to become the Deputy President (which means he also becomes the new Deputy Prime Minister) and eventually the Prime Minister after 2020.
Yes, that is a plan lifted from Anwar’s old playbook, which Mahathir thought Mukhriz can also use. Of course, Mahathir’s excuse is that once Mukhriz takes over as the new Finance Minister then Najib would no longer be responsible for 1MDB. It would now be Mukhriz’s responsibility and Mukhriz will make sure that the matter is solved and is no longer a problem.
Make Mukhriz the Finance Minister and Mahathir will stop attacking Najib on the 1MDB issue
Mahathir was using 1MDB as the bait for Najib to agree to handing over the job of Finance Minister to Mukhriz. Appoint Mukhriz and your problems are solved and it now becomes Mukhriz’s problem. It was just like when Daim handed the post of Finance Minister to Anwar back in 1991. The Bank Negara US$10 billion FOREX losses problem would no longer be Mahathir’s and Daim’s problem. It would now become Anwar’s problem and for him to solve.
And that was precisely why Daim resigned as Finance Minister in 1991 and the job was handed to Anwar. It was not because Daim and Mahathir had quarrelled over the RM60 billion Umno assets that Daim was holding under proxies and which he refused to hand back. This was the story they spun to hide the real reason why Daim had to quietly escape through the back door. The real reason why Daim handed over the Finance Minister’s job to Anwar was because it was soon going to be public knowledge that Bank Negara was bleeding profusely due to its heavy losses incurred from gambling on the FOREX market.
In April 1991, Reuters exposed the truth: that Bank Negara was the biggest FOREX gambler in the world (in fact, the western media had already been reporting this as early as 1989). In September 1992, George Soros borrowed US$8 billion and attacked the market. Bank Negara, which was exposed, practically collapsed under the weight of its heavy losses and lost US$10 billion while Soros made US$1.2 billion.
In 1993 Anwar had to earn his stripes by standing up in Parliament and deny that Bank Negara had lost billions playing the FOREX market. And it was not until 1994 that the world found out the truth. Even then in 1994 Anwar lied, yet again, and said that Bank Negara only made ‘paper losses’ and that the amount was small and not in the billions.
Well, in the next episode we will reveal what really happened in the 1980s-1990s that resulted in Bank Negara losing US$10 billion (equivalent to RM98 billion today) since Lim Kit Siang no longer wants to talk about it after screaming for 30 years that the truth must be told.
In the next episode we shall question Zeti Akhtar Aziz’s role in this whole fiasco, question how come Bank Negara lost US$10 billion whereas Soros made only US$1.2 billion, question whether the so-called US$10 billion FOREX loss was just a camouflage to cover money that was stolen in other ways, and question if Bank Negara did not really lose US$10 billion then were did the money go to, and so on. So, till then, stay tuned.