After a nail-biting three days following Malaysian Prime Minister Mahathir Mohamad's attempt to resign on June 22, Malaysia learned that his deputy, Abdullah Ahmad Badawi will take over--in October, 2003. The announcement by a government spokesman ends the anxious speculation of recent years about Mahathir's successor. By planning his retirement while still at the top of his game, 76-year-old Mahathir may avoid repeating the mistakes of former Indonesian President Suharto and the Philippines' Ferdinand Marcos, who didn't know when to quit. "He has realized it is time," says former Philippines President Fidel Ramos.

After 21 years in power, Mahathir aims to ensure his legacy by gradually handing over the reins to 62-year-old Abdullah, who is expected to continue the Premier's pro-investment policies. Recently feted by Washington as a key ally in the war against terror, Mahathir can begin to devote more time to his self-appointed role as the Islamic world's moderate voice, while playing the role of elder statesman back home.

One issue for Abdullah is whether he will continue the country's longtime affirmative action plan to uplift the majority Malay population. Mahathir recently called the policy flawed, particularly the promotion of the Malay language over English. As former Education Minister, Abdullah understands the issues. But he must balance the need to remain globally competitive against the political risk of leaning too far to the West.

By Frederik Balfour in Hong Kong

Edited by Rose Brady

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