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Last Updated: Tuesday, 11 May, 2004, 15:37 GMT 16:37 UK
Ex-Malaysia PM becomes Proton's adviser

By Jonathan Kent
BBC, Kuala Lumpur

Proton is lagging behind its competitors

Six months after his retirement Dr Mahathir Mohamad, the architect of the modern Malaysian economy, is starting to make his presence felt again.

I know Londoners and New Yorkers who can't sleep when they're in the countryside - the quiet keeps them awake.

It's been a little like that in Malaysia since the end of October 2003 when the country's Prime Minister of 22 years Dr Mahathir stepped down.

The silence has been unnerving.

Last month Dr Mahathir announced that he'd become - some said he'd appointed himself - adviser to the national auto manufacturer Proton.

He'd already taken up a similar advisory role with Petronas the state oil company.

Antiquated practices

But with Dr Mahathir it's difficult to tell where the advice stops and the orders begin.
Dr Mahathir
Dr Mahathir: Hard to tell where the advice stops and the orders begin

He's already poured cold water on a suggestion by his old friend Rafidah Aziz - Malaysia's International Trade Minister - that it's time for Proton to look for an international partner.

Over the last 20 years most of the medium-sized automobile makers have consolidated, leaving a handful of global giants.

They thrive on economies of scale that Proton simply doesn't enjoy.

Its exports slumped from 14,500 to just over 8,000 between 2000 and 2002.

Even it's domestic market share, where foreign competitors are hit by import tariffs of up to 300%, shrunk last year to 49% from 60% the year before.

Some of the company's models are more than 10-years-old - and it just doesn't have the means to produce news ones at the same rate as its competitors.

Dr Mahathir says Proton is evaluating several offers from other motor manufacturers - but he won't say whom.

And what would they be letting themselves in for?

Feudal hierarchy

Proton is an almost feudal operation headed by a prince - his adviser is a man who rails against the West, and globalisation and insists the company remain Malaysian - and he's one who few dare contradict.

That's a lot of baggage for a partner to take on along with Protons other problems.

And there are those who believe that Dr Mahathir's ambitions as an adviser don't stop at Petronas and Proton but that he has other giant former state enterprises in his sights as well; Telecom Malaysia and the national power company Tenaga National.

It may be that Dr Mahathir gave up the finance portfolio when he retired only to end up running substantial portions of the Malaysian economy by offering advice the directors of such companies feel unable to refuse.

It's a prospect that will have international investors chewing hard on the ends of their pencils.

Profile: Mahathir Mohamad
31 Oct 03  |  Asia-Pacific
Country profile: Malaysia
22 Mar 04  |  Country profiles
Abdullah sworn in as Malaysian PM
22 Mar 04  |  Asia-Pacific

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