Having the top job as central bank governor of Malaysia has been described as a thankless task. There are so many competing interests. Luckily, Dr Zeti Akhtar Aziz - Malaysia's first woman central bank governor - is arguably one of the most capable professionals to sit at the helm.
Her career at Bank Negara began in 1985 when she took the post of deputy manager of the economics department. Ten years later, she was the first woman to be appointed as one of bank's four assistant governors.
For those in the investment community who track Bank Negara's moves, Zeti is a familiar face. She was one of the key people investment advisers to get an understanding of Bank Negara's policies. And from 1997 onwards in particular, she was in charge of explaining the central bank's position during the financial crisis.
But having the job of central bank governor in Malaysia hasn't always been easy - as the experience of previous governors through the 1980s and 1990sáshows.
Abdul Aziz Taha - too independent
Abdul Aziz Taha resigned in 1985. Bankers have long claimed Azizáleft after a tussle of power with Daim Zainuddin, during Daim's first appointment as Malaysia's Finance Minister. Daim had been chipping away at the central bank governor's power in decision-making.
The clash of the titans came to an end after Aziz was removed as head of the Capital Issues Committee in early 1985 when the CIC was put under the purview of the Finance Ministry. Today the CIC has been replaced by the Securities Commission-Malaysia's securities regulator.
Differences in policy were even more important. Aziz - an accountant by training - wanted Malaysia's banks and companies to follow prudent lending practices at home and abroad. Malaysia's business and political leaders did not want to do so, and so a clash became inevitable.
Aziz was politically neutral, with an eye to close and conservative regulation.áAs chairman of the CIC, Aziz had wide powers over all deals made by listed companies in Malaysia. By blocking some deals, Aziz lost the friendship and supportáof the Finance Minister and other Malaysian entrepreneurs.
Jaffar Hussein - central bank governor or hedge fund manager
Jaffar Hussein took over from Aziz as Malaysia's third central bank governor in June 1985. Coming from Malayan Banking Berhad, Jaffar was described as having one of sharpest brains in the business. Under his tenure, Malaysia's central bank became a formidable global currency trader. Malaysia's central bank took big positions against other nations' reserves and their central banks, often for extraordinary gains.
Still, it was only a matter of time before he called the market wrong.
Bank Negara took a huge bet against the pound and lost US$5.8 billionáin 1992 and 1993 . By 1994, Bank Negara had to be bailed out by a fresh infusion of cash from Malaysia's Finance Ministry and Jaffar resigned. Butáhe was never viewed as a bad guy by Malaysia's top leaders, who saw in his attempts the vision of developing countries protecting their own interests by any means necessary. Even if it meant turning a central bank into a hedge fund.
Ahmad Don - central bank scapegoat
Ahmad Don, who took over the helm in 1994, had a trouble free reign until the recent financial crisis of 1997-1998. Then, every action he took to tighten Malaysia's monetary policy during the first year of crisis was savagely attacked by Malaysia's politicians. He was blamed for everything - for not ensuring sufficient credit lines to Malaysia's companies during the credit crunch, to tightening bad loan definitions so that many companies went bankrupt. In the end, he, like Aziz, was cut out of every big organisation created to manage the crisis, from the Asset Management Agency to the National Economic Action Council.
The central bank is not independent
He resigned in August 1998, just a month before former Finance Minister Anwar Ibrahim was sacked. The day after he left, Malaysia's Prime Minister Mahathir Mohammad told state news agency,"The central bank is not independent." Ahmad was replaced by Ali Abul Hassan, a loyalist who had headed Malaysia's privatisation agency, the Economic Planning Unit. Zeti took up the deputy governor position.
When Zeti was appointed governor last month, Mahathir again re-iterated that the central bank's policy follows the government's policy. Whichever wayáyou view it, Zeti has her work cut out for her.
The path of her predecessors has been fraughtáwith minefields. From balancing monetary policy with regulating policy, to managing consolidation and reconstruction in virtually all of Malaysia's financial services. We can only wish Dr Zeti the very best of luck.á
