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Last Updated: Thursday, 30 October, 2003, 14:15 GMT
Mahathir bids farewell to parliament
Malaysian Prime Minister Mahathir Mohamad (right) and Abdullah Badawi
Dr Mahathir is keen to stress it is a smooth succession
Malaysia's Prime Minister Mahathir Mohamad has addressed his country's parliament for the last time as premier.

Dr Mahathir, who is the longest-serving elected leader in the region, hands over to his deputy, Abdullah Badawi, on Friday after 22 years in power.

In his speech, the Malaysian leader returned to two themes which have marked out his leadership - the economy and his uneasy relationship with democracy.

He summarised Malaysia's economic development over the last 50 years - from rubber and tin producer to industrialised nation - but warned that democratic freedoms could lead to anarchy.

Abdullah Badawi (left) is greeted by Dr Mahathir Mohamad
Mahathir Mohamad retires after 22 years
Abdullah Badawi new PM

"Anarchy can take place because of an obsession with democratic freedoms. The belief that if democracy is implemented then everything will be well has no basis, especially if democracy is imposed immediately," he said.

Dr Mahathir stressed Malaysia's multi-racial make-up was a potential tinder-box, which could explode if "national unity" was not assiduously maintained.

Malaysia has a Malay majority of around 60% but large Chinese and Indian ethnic minorities. It has some of the toughest censorship rules in the world and operates detention without trial.

"We have seen how many other multi-ethnic societies have failed because each race places its own interest first before the interest of the nation. If we are not careful we too will fail and be destroyed," he said.

The Malaysian leader said he was ready for retirement even though he acknowledged he had not accomplished everything he wanted to.

"I've had my day, it's other people's turn now. I had 22 years. I can't complain," he was quoted as saying by Malaysia's Bernama news agency.

Dr Mahathir is due to be succeeded on Friday by his deputy, Abdullah Badawi.

Khairy Jamaluddin, an assistant to Mr Badawi and also his son in law, told the BBC there would be changes in style and emphasis, but basic policies would remain the same.

"This is not the end of an era because this is a continuity, not a change of regime in any sense," he said.

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