Metropolis of Dreams
	Is Kuala Lumpur getting too crowded? No problem. Spend $8 billion to build a new capital
	By Anthony Spaeth

Originally published December 4, 1995
A sidewalk stroller in downtown Kuala Lumpur can hardly turn around without encountering huge construction cranes. The ones atop the twin 450-m Petronas Towers will soon be dismantled, after work is completed on what are now the world's tallest buildings. A decade-long construction boom has pretty much entombed the former colonial backwater, as the capital is invariably described, in concrete and asphalt. These days, "K.L." is an Asian metropolis that, with a few more throbs of the GDP, may become an oppressive, traffic-clogged sister city to such urban disasters as Bangkok, Taipei and Manila.

Not, however, if Prime Minister Mahathir Mohamad has his way, which he usually does. Mahathir has clapped his hands and sent the cranes migrating to a 4,400-hectare former rubber plantation 25 km south of K.L., where he has commanded a new $8.1 billion capital to rise. The satellite city is named Putrajaya, after the country's first Prime Minister, Tunku Abdul Rahman Putra. Mahathir is hoping that Putrajaya, where nearly every major federal agency will have its headquarters, can also attract banks, securities houses and media organizations weary of Asia's more congested capitals—and particularly of wealthy Hong Kong, which will fall under Beijing's control in 1997. That date has put some hustle into the building bustle. Construction has been under way since August, and will continue for the next decade, though Putrajaya should be ready for occupants far earlier. Mahathir plans to move his own office there as soon as 1998.

On paper, the new city looks like something out of a science-fiction comic book. Private cars will virtually be banned—Mahathir envisions an "environmentally benign" metropolis—and replaced by a public transport system combining buses, metros, trams and ferries. More than half a million people will reside in Putrajaya and surrounding suburbs, and sleek commercial buildings will accommodate 135,000 workers. There will also be a golf course, sports stadium, cultural center and shopping malls, as well as a giant man-made lake surrounding the city center, complete with a floating mosque. Fiber-optic cable is being laid beneath the streets, and residents will be able to have Internet access and other electronic-superhighway conveniences.

Putrajaya is the latest in a series of Malaysian megaprojects. The Petronas Towers, built for the national oil company, will have cost $1.2 billion by the time they open in early 1997. A new Kuala Lumpur airport, set for completion in 1998, will require $3.5 billion. All across the country, construction crews are laying highways, sewage systems, a gas pipeline and, on Borneo, building a $5.8 billion hydroelectric dam. The bill for this infrastructure binge has topped $60 billion, and some economists wonder whether Malaysia can afford it. The required borrowing, they say, might fuel inflation, strain the country's financial system and derail the roaring economy, which has grown 8% or more for eight straight years. "It's a timing issue," says Low Ming Siong, managing director of Peregrine Services in Kuala Lumpur. "Do we really need an $8 billion new capital now?"

If Mahathir does manage to build his dream city, will anyone join him there? He hopes to attract multinational firms looking for reasonable property prices, comfortable life-styles and a stable political system. "My emphasis now," says Anwar Ibrahim, the Deputy Prime Minister and Finance Minister who is overseeing the financing for all the projects, including the new city, "is on the financial services and foreign media." Anwar predicts that rents in the new capital will be among Asia's lowest. In addition, literacy among Malaysia's 20 million people is a relatively high 80%, English is widely spoken, and a greater percentage of Malaysians study abroad than do residents of any other Asian country.

Nonetheless, Malaysia is in some ways more insular than its Asian rivals. By law, outside investors must have a Malaysian partner. Generally a foreign company can keep only two expatriate employees in the country. And the Kuala Lumpur stock exchange, though the world's 15th largest, is plagued by volatility and frequent rumors of trading by politically linked parties. "We still have remnants of the earlier hard-core nationalist policies," admits Zainal Aznam Yusof, deputy director general of Malaysia's Institute of Strategic and International Studies. "We're still very backward."

Mahathir's capacity to deliver shouldn't be underestimated, as he has proved frequently in 15 years as Prime Minister. Experts scoffed when he decided in 1983 to start a domestic automobile industry. Today Malaysia's profitable Proton employs more than 4,800 people; it accounts for some 72% of the domestic auto market, and last year sold more than 10,000 cars in Britain.

The Putrajaya project is no doubt riskier, though to the government the alternative is far worse. "We're scared when we look at those megacities in Asia," says Ibrahim Saad, deputy minister in the Prime Minister's department. So scared that to raise money for the move, the government expects to sell off nearly all its buildings in Kuala Lumpur—including the Prime Minister's office.

—Reported by John Colmey/Kuala Lumpur

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