Malaysian PM Defers Resignation

Moving to calm nerves shaken by his sudden resignation flip-flop, Prime Minister Mahathir Mohamad has agreed to a succession process keeping him in office until after an Islamic summit in October 2003, when his deputy will take over.

The plans, announced by the ruling party's supreme council, confirmed Deputy Prime Minister Abdullah Ahmad Badawi as Mahathir's heir and should ease the disarray following Mahathir's tearful announcement Saturday that he wanted to retire, then agreement to stay after supporters begged him.

Abdullah, 62, dubbed the "Mr. Nice Guy" of Malaysian politics, would succeed Mahathir as prime minister and at the same time take the helm of the United Malays National Organization party and the governing coalition.

The succession was laid out in a statement read by Information Minister Khalil Yaacob after a meeting of the party's supreme council. It said that Mahathir would step down after hosting a summit Oct. 24-25, 2003 of the Organization of the Islamic Conference.

Before the summit, Mahathir will take two months leave and Abdullah will serve as acting leader of the government and party.

Abdullah dismissed speculation that Mahathir, 76, who has amassed more power than any of his predecessors during his 21 years in office, had become a lame duck.

"All this thinking of a lame duck is in your mind," Abdullah said. "We would still obey him."

The announcement came after Malaysian shares suffered a second day of losses, closing 1.3 percent lower at 717.21 points.

Mahathir is under pressure from loyalists to lead the party in early elections next year and capitalize on declining popularity for the Islamic fundamentalist opposition, which made gains in 1999.

The transition increases the chances that elections could be held next year and contested under Mahathir's leadership. Abdullah would have time to consolidate his position and start filling the shoes of a leader many Malaysians cannot imagine replacing.

Mahathir dropped a bombshell Saturday when he announced without warning at his closing speech to UMNO's annual congress that he wanted to step down. He was mobbed at the podium and taken to a back room, where he was persuaded to withdraw the resignation.

Mahathir left for Naples, Italy, on vacation the next day after reaching a compromise on the transition. He has not been seen in public since Saturday.

Mahathir had been adamant to quit all posts and "it took a lot of coaxing to get him to relent," a high-ranking government official told The Associated Press on condition of anonymity.

"It is a compromise that balances UMNO's need for him to serve the country with his desire to step down immediately," the official said.

Mahathir has not said why he wanted to resign, but officials who met him Sunday said he felt he had served long enough and wanted to spend more time with his family. Some opposition voices have accused him of staging political theatrics to win sympathy.

Mahathir has strengthened the party's position since 1998, when he sacked his then deputy, the charismatic Anwar Ibrahim, triggering large street protests.

Anwar is serving prison sentences totaling 15 years for corruption and sodomy and claims he was framed to prevent him challenging Mahathir for power. The government denies it.

Public sympathy for Anwar helped the fundamentalist Pan-Malaysia Islamic Party increase its seats in Parliament and win control of a second of Malaysia's 13 states in 1999. Mahathir's coalition kept a two-thirds majority in Parliament, however.

The fundamentalists have lost much appeal since Sept. 11, which increased fears among moderates among the Malay Muslim ethnic majority and the non-Muslim Chinese and Indian minorities about the party's plans to install an Islamic state.

The fundamentalists suffered a setback Sunday by the death of their leader, Fadzil Noor, following recent heart bypass surgery.

Mahathir has positioned himself as a moderate Muslim leader and emerged as a key regional ally in the U.S. war on terrorism. Scores of alleged extremists have been jailed, including one who allegedly allowed two of the Sept. 11 hijackers to meet at his apartment in 2000.

Unlike his flamboyant predecessor, Anwar, Abdullah has stayed in the background and seldom says anything that could be misconstrued as going against his powerful boss.

Abdullah served Malaysia as education, defense and foreign minister before becoming Mahathir's deputy, but is untested in economic policy, an area where Mahathir is confident enough to hold the finance portfolio.

Speculation has been constant that powerful barons in UMNO would try to challenge his leadership once Mahathir is out of the way, and the long transition should give Abdullah time to consolidate his position.