The National Economic Action Council (NEAC) may be downsized or dissolved following former finance minister Daim Zainuddin's resignation from all government posts, including the council's executive director on Saturday, said a source close to the council today.

When contacted by malaysiakini, the source said, on condition of anonymity, "It will not surprise me if the government decides to reduce the council's operation scale or to adjourn it soon."

However, the source stressed that the possible dissolution of NEAC would not entirely be due to Daim's resignation.

"The council was set up to carry out urgent tasks as required at the time of its establishment and any such body will not stay forever.

"Any economic council will only exist for a specific time frame and eventually go when its tasks and objectives have been fulfilled. Daim's resignation could be just the catalyst for that," the source added.

Not affected

NEAC was officially established as a consultative body to the Cabinet in early 1998 to tackle the economic problems following the Asian financial crisis a year before. It had assisted the government in the formulation and implementation of many policies to revive and strengthen the country's economy.

Daim was appointed as the NEAC executive director at the end of 1997 - even before the full formation of the council.

He assumed the post until recently when he stepped down as finance minister, special functions minister, Langkawi Development Authority chairperson and NEAC executive director. Daim also relinquished his post as Umno's treasurer but remains the member of parliament for Merbok.

Following this, Prime Minister Dr Mahathir Mohamad announced that he would take over as acting finance minister and acting special functions minister. However, he has yet to appoint the replacements to assume the other posts which Daim resigned from.

Daim has not spoken to the press or the public so far on his resignation although the local and foreign media had been attempting to get his comments since last Saturday.

According to the source, the council's Exco, working committee and secretariat are not affected for now as Daim's resignation just came about five days ago. "They are pretty much the same as they were before."

Rumour factory

Meanwhile, an NEAC member Zainal Rampak, who is also the president of Malaysia Trades Union Congress (MTUC), denied that the council will undergo any structural changes soon.

"We just had our last meeting about two weeks ago and there was no indication that this (dissolution) will happen. Our country is always a rumour factory," he quipped.

However, he said that the council has not had any meetings since Daim's resignation. When asked who would chair the next council meeting without its executive director now, Zainal replied, "I am sure Dato' Mustapha (Mustapha Mohamed, NEAC adviser) can do the job."

In a related matter, an economist told malaysiakini that the stock market had not been drastically affected by Daim's resignation since Tuesday - as some of the market analysts had predicted - mainly because the investors had "digested their fears in the past couple months".

"The market would have been shaken up badly if it was a sudden thing but many people already expected Daim's resignation when he went on a two-month leave," said the economist who works for a local business group.

The economist who wished to remain anonymous added that the market is more concerned with whom the successor will be.

"Mahathir is unlikely to hold the post (acting finance minister) for too long and people are curious about who will be made the new one."

The Kuala Lumpur Stock Exchange (KLSE) Composite Index closed at 567.36 and 564.08 on Tuesday and today respectively, a minor drop of less than one percent which the industry folk regard as "normal".

Political pundits are predicting that several political figures who have been lying low for some years may make a comeback as the next finance minister, most notably Tengku Razaleigh Hamzah.

However, the fact that Bank Negara Malaysia assistant governor Dr Awang Hadek Hussin resigned yesterday from the central bank to be 'actively involved in politics' has renewed speculation that he may turn out to be the one who fills the post.