The Maminco Affair and the Politics of the 1980s

by Terence Netto@www.malaysiakini.com

The spot of contention between Dr Mahathir Mohamad and Anwar Ibrahim over whether the former Prime Minister had indeed taken loans from the World Bank during the period of the Asian Financial Crisis (1997-1998) is interesting in the way it is reminiscent of an episode at the tailend of the premiership of Tun Hussein Onn.

The matter concerned Malaysia’s attempt to corner the tin market on the London exchange which resulted in the collapse of the price of the commodity in 1981, with consequent huge losses to the country’s exchequer. It was called the Maminco Affair, details of which began to seep into the public domain a few years after the collapse of the price of tin, once a top-earning commodity to the country.

When the Maminco Affair began to leak into the public sphere, Tun Hussein (right), who had retired as Prime Minsiter in the middle of 1981, was already in a state of advanced disenchantment with the way things were going under chosen successor Mahathir.

He gave vent to his misgivings at press conferences held immediately after functions where he had received donations from the private sector for the Tun Hussein Onn Eye Hospital, a project being built under his patronage.

His publicly aired qualms, on a host of issues in which he favoured the liberal line to the authoritarian one that Mahathir was beginning to tread, were increasingly embarrassing to the incumbent PM.

This was at a time when the billion-ringgit Bank Bumiputra Finance scandal was being exposed to national attention and the Mahathir administration had assumed a high spending aura, what with the Dayabumi project and the palatial prime ministerial home at Sri Perdana, that were either completed or in the works.

The era of edifice complexes, with their attendant inflated costs and huge wastage - an unnerving throwback to the days of oriental potentates - had begun.

Hussein was clearly unhappy with the goings-on but because of the indirection and reticence that characterise Malay political discourse, it was difficult at that time to infer whether there was anything more substantive to the elder statesman’s discontent than the mere grumpiness and disdain of age.

Which PM was responsible?

At the time, Hussein enjoyed a high standing in the public perception because of the way he gracefully stepped aside from wanting a second term as the elected UMNO President, to give way to a younger and seemingly more dynamic breed of successors.

Thus when he sustained his tone of public remonstrance, he became a liability to the Mahathir administration. That’s when the Maminco Affair began to dribble into the media headlines.

Because the timeline on the matter raised questions about which PM was responsible for the affair and under whose watch it had occurred, Hussein was quick to disavow any responsibility for the matter, although the collapse of the tin market had occurred in 1981.

The early part of that year saw Hussein on medical leave because of a heart bypass operation in London. This was followed by a period when he was in the country but largely convalescent and contemplating retirement which became the reality by April when he tearfully announced his decision not to contest the Sri Gading (in Johor, his home state) UMNO division chairman’s post.

When the Maminco debacle sizzled in the national arena a few years later, the matter of who was responsible for the decision to corner the tin market became critical to the whole question of apportioning blame.

A public pummeled by the steady drip of controversial disclosure over the BMF and other burgeoning scandals was in the mood for blame-fixing. Hussein was confident he was not responsible while Mahathir was discreetly mute about responsibility for the matter.

Mahathir is always careful to show he is not an ingrate to people who have helped him. His appointment as Deputy Prime Minister in April 1976 by Hussein was the most significant act of political supercession, over the more pressing claims of others, since Tunku Abdul Rahman favoured Abdul Razak Hussein over Dr Ismail Abdul Rahman as his UMNO deputy in the mid-1950s, and Razak’s selection of Hussein himself for the same position after Ismail had suddenly died in August 1973.

Hussein humiliated

Thus, after a spell of public contention over who was responsible for the Maminco Affair, Mahathir gave permission for cabinet meeting minutes to be exposed.It showed that in the final few meetings Hussein chaired in mid-1981, a decision was made to corner the tin market.

There followed the spectacle of a humiliated Hussein giving vent to a public apology over his responsibility while ex-premier Tunku Abdul Rahman (left) aired his anguish that the whole thing was highly unfair to Hussein.

In extenuation, the Tunku said he himself was on long leave prior to his retirement in September 1970 and so could not be held responsible for decisions made just prior.

The abiding memory of that incident was Hussein’s apology, promptly tendered when notified of the cabinet minutes. He offered no extenuations, excuses, or exculpations. He just bowed his head in abject submission to what was the seeming truth of the matter of responsibility for Maminco.

But the jury is still out on who was really responsible for Maminco because the case is like several other issues of great moment in Malaysian history, like the Project IC in Sabah and a host of others - too many to name, simply because these are like a Pandora's box of horrors.

No doubt, these issues would soon come under the ferreting thrust of multiple truth commissions whose sittings would be deemed necessary as and when these matters bob like cork on the sea of recurrent public concerns.

Like buried gold, the truth will have to be disinterred because it is useless otherwise, and simply cannot stay entombed for long.