Much is at stake as Malaysia prepares for its first new Prime Minister in more than two decades. In his 22 years running the government, Mahathir Mohamad has helped build his tropical nation of 24 million people into one of the most economically prosperous Muslim countries in the world. He has not been afraid to take bold measures. His imposition of capital controls during the 1998 Asian financial crisis -- against the advice of most prominent international economists -- protected the stability of the country's financial sector and has not done long-term damage to the economy.
At the same time, despite Mahathir's frequent anti-Western rhetoric, Malaysia has remained one of the more tolerant countries in the Muslim world. The global community should not take this achievement for granted. Nor should it forget that Mahathir has been warning against, and warring with, Islamic extremists since long before the rest of the world regarded the threat seriously.
Yet Malaysia's economic progress under Mahathir came at a cost to its political and civic institutions. Malaysia inherited a legacy of strong institutions from its time as a British colony. It also inherited draconian national security laws. Mahathir has not been shy about using the Internal Security Act, which allows detention without trial. But he has been less comfortable with the checks and balances that were the softer part of the British legacy. Courts, the press, dissenting political voices -- all these are now weaker than they were at the beginning of Mahathir's time in office.
The incoming Prime Minister, Abdullah Badawi, faces the dual challenge of containing continued Islamic militancy while at the same time seeking to repair Malaysia's civic institutions. He also needs to find a new economic model for an economy that is being sandwiched between low-cost countries like China and Vietnam and higher-skill ones such as South Korea and Taiwan.
Improving Malaysia's educational system should be a high priority for promoting economic growth and improving the living standards of the population. At the same time, Malaysia also needs to find a way of more fully employing the talents of its ethnic Chinese population, who make up one-quarter of the country and are among its most entrepreneurial citizens. A good first step is ending discrimination in education against the country's ethnic Chinese, but more will be needed.
Mahathir deserves credit for his stewardship of Malaysia. But he has ruled with an often bruising hand. Badawi's challenge is to heal the wounds, while maintaining Malaysia's political stability and economic momentum.