Mahathir Mohamad. JOHN STANMEYER--SABA FOR TIME

By ANTHONY SPAETH

"He gave us 16 years of tremendous development and economic progress...But history is being erased."

There is no shortage of honorifics in Malaysia, vestiges of the days of sultanates and princely kingdoms. But the man at the top, Prime Minister Mahathir Mohamad, is known simply as Dr. M. That rings about right: not only is Mahathir a trained physician, but as leader for the past 17 years, he has generally been brisk, modern, quick to diagnose and even readier to prescribe. In addition to crafting Malaysia's grand, national affirmative action scheme, Mahathir, who turns 73 on Dec. 20, also personally chose bathroom fixtures for the world's tallest building, Kuala Lumpur's Petronas Towers.

In 1998, Dr. M's flip side surfaced. Like a Malaysian Mr. Hyde, Mahathir turned with venom on a political rival, Deputy Prime Minister Anwar Ibrahim, sacking him and then branding him a homosexual. Anwar was arrested and tossed into a Kuala Lumpur lockup, where he suffered a severe beating. The fact that Anwar was Mahathir's own one-time heir apparent only made Dr. M's wrath more incandescent. In the same week in September that he fired Anwar, Mahathir thumbed his nose at the global economy by instituting restrictive exchange controls on the Malaysian currency. He put the world on notice that unfettered capitalism may not be for every country--a concept that has gained adherents worldwide since Mahathir began raving about speculators' conspiracies and Jewish financial cabals more than a year ago. Though Mahathir may well have made a martyr out of his former protege, 51-year-old Anwar, no one drove the news with such ferocity this year as Dr. M--and that makes him Asia's Newsmaker of 1998.

Mahathir's Malaysia has undergone vast changes in the past year. When the economic crisis started to bite, Malaysia seemed better suited to weather the storm than virtually any of its troubled neighbors. Not for long. As Mahathir attempted to arrange multimillion-dollar bailouts for local companies, Anwar, then Finance Minister, balked. After economic woes helped topple Indonesian strongman Suharto, Anwar and his supporters decided that Mahathir, too, might be ready for early retirement. They tried to drive him out at a June meeting of the ruling party. But they underestimated his political support, and the Prime Minister suddenly took a new interest in old allegations that Anwar had been sexually promiscuous with both men and women. "Mahathir chose to fight in the most brutal way," says Rahim Karrim, a political analyst. "He is ruthless when dealing with opponents."

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