MALAYSIA: Malaysia's ruling party yesterday said Prime Minister Mahathir Mohamad, one of Asia's longest-serving leaders, will hand power to his deputy late next year in a move investors praised as an orderly transition.
But politicians in neighbouring countries fretted over the potential for instability in Muslim-majority Malaysia and said a smooth succession was paramount in a region coping with political uncertainty in Indonesia and the threat of Islamic extremism.
The party said Mr Mahathir (76), who has presided over 21 years of immense change, had agreed to postpone his retirement plans to ensure a smooth transfer of power and responsibilities to the Deputy Prime Minister, Mr Abdullah Ahmad Badawi.
"All these things about lame duck is in your mind. During the transition the status of Dr Mahathir as Prime Minister should be preserved," Mr Abdullah said after a party leadership meeting.
The departure of Mr Mahathir, who tearfully announced his resignation on Saturday on live television, was always bound to cause jitters among investors in a region familiar with political upheaval, but financial market reaction was relatively positive.
Malaysia remains one of the most prosperous and stable countries in South-East Asia, and Mr Abdullah is regarded as a mature and pragmatic politician even if he does not possess Mr Mahathir's visionary and steely qualities, analysts said.
Speaking after a meeting of leaders of the governing United Malays National Organisation (UMNO), Mr Abdullah told a televised news conference the date of the next general election had not been discussed.
A national poll need not be held until 2004, and the ruling Barisan Nasional coalition appears well set to build on a two-thirds majority as the Islamic opposition has faltered since the September 11th attacks on the US. Mr Abdullah said Mr Mahathir's position was in no way diminished and he would keep the finance ministry portfolio for the rest of his tenure.
"There is no question that during the transition I will steal the limelight from him, that should not be the case," said Mr Abdullah. UMNO secretary general Khalil Yaakob said the party leadership had accepted Mr Mahathir's offer to defer his resignation, saying Mr Abdullah will take over after a summit of the Organisation of the Islamic Conference (OIC) in October 2003. - (AFP)