Economic Reform and Growth
In the 1980s, Dr. Mohamad Mahathir succeeded Datuk Hussein as prime minister. Mahathir instituted economic reforms that would transform Malaysia into one of the so-called Asian Tigers. Throughout the 1990s, Mahathir embarked on a massive project to build a new capital from scratch in an attempt to bypass congested Kuala Lumpur.
Beginning in 1997 and continuing through the next year, Malaysia suffered from the Asian currency crisis. Instead of following the economic prescriptions of the International Monetary Fund and World Bank, the prime minister opted for fixed exchange rates and capital controls. In late 1999, Malaysia was on the road to economic recovery, and it appeared Mahathir's measures were working.