The rumours prove true yet again. The prime minister, Dr Mahathir Mohamad, confirmed his finance minister, Daim Zainuddin, is on two months' leave from last week. He denied the second part of the rumour that he had resigned. He blames others for causing it, but the more he and his government acts in secret or by fiat, refusing to take even Parliament into his confidence, the truth of these rumours is all but certain.

When he explains that Daim would attend neither cabinet nor Umno meetings while on leave but would be in office at the Treasury to look at papers, something surely is wrong. He is on leave, or he is not. From the date his leave begins, an acting minister takes charge. So, why is he then at work? When these rumours were persistent, why did Dr Mahathir wait a week before announcing it? Why is it important that he would not attend Umno meetings?

The rumour in town is that Daim gave Dr Mahathir his resignation, asked him to date it at his convenience, and told him he is going on two months' leave. In other words, Daim forced it upon the prime minister. Rumours about what happens in the government, and that high ranking officers who should know believe it, indicates the truth of it. When Dr Mahathir announced Daim's leave as stealthily, it raised more questions than answers.

Daim is under pressure; in the cabinet, in the government, in Umno, in Parliament. The government rescue of MAS' principal shareholder, Tajuddin Ramli, was forced upon the cabinet, which gave its approval as a fait accompli.

Dr Mahathir is annoyed that EPF funds were used to bail out, in his words, 'a private company', which Time dotCom is. He asked Daim for how liable EPF is. Daim controls, directly and indirectly, about 60 percent of the counters on the KLSE. Every major privatisation of government assets is linked to his cronies and his proteges.

Separate ways

Umno demands an accounting of its assets after the breakup of the old Umno in 1987, and its investment arm broken up. Daim, as Umno treasurer, has not given a detailed report on what is held and what its position is. In recent meetings of the Umno supreme council, the pressure on him to reveal all is so great that not attending Umno meetings would allow him time to write a report on how much it has lost. There is no reason to assume that Umno holdings would be well taken care of when personal holdings are on the brink of bankruptcy.

More than that, the PAS member of parliament, Mohamed Sabu, has mercilessly put Daim in a spot with his cutting remarks. He is so persistent in raising what would not if the opposition did not have the numbers it has now. In one session, he wanted to know who 'this Josephine' was, since she is chief executive officer of a bank and is awarded the RM1 billion computerisation of government hospitals; and if her 'Napolean' is a short man with a moustache. That Mohamed Sabu comes up for criticism in the mainstream press suggest that his barbs hit home.

This is not reported in the newspapers, but is widely told on the ceramah circuit. People believe it. Even in government. They do not believe that Daim should be in the cabinet at all; that if he should be it should not be in an important portfolio as finance and overseeing economic policy in the Prime Minister's Department.

Obviously, Dr Mahathir himself believes this now; he has appointed as his special economic advisers, Ali Abul Hassan Sulaiman, the former Bank Negara governor, and Nor Mohamed Yakop. Why should he have them when Daim is already economic adviser to the government? It is still just a rumour but Dr Mahathir and Daim are going their separate ways and do not see eye-to-eye on just about everything.

Ultimately, all this has come to a head because the two men believed in their own belief that nothing on earth could make them fall. They lived in their past glories, that what they did once correctly - in defying IMF advice - would work their magic in other fields, with different skills, and different policies in changing circumstances. It did not.

There was self-interest in the fallout of this economic and financial bonanza. That is where everything went wrong. The more autocratic the government became, the more lackadaisical it was in maintaining the country's finances. The massive projects to show Malaysia had arrived as a nation was at the cost of its future.

Sans checks and balances

Malaysia is immured in so much debt - mostly from its failed policies - that the banking system is in a mess, and if Danamodal and Danaharta were not set up to take over the non-performing loans, it would have collapsed as spectacularly as it did in the United States during the Great Crash of 1929.

However you look at it, Malaysia is on the brink of one. It is made worse by rumours eventually turning out to be correct. The government runs without checks and balances, and does not even take Parliament into its confidence. It has the answers, and no one else can challenge it. It did once. But it does not any more.

Daim's resignation is therefore inevitable. Umno regards him as the evil genius behind Mahathir. For an unelected senior Umno leader, as treasurer, he wields immense power, and uses it. But he is challenged. He is blamed, willy-nilly, for what happened to the jailed former deputy prime minister. His behind-the-scenes moves to align himself with whomsoever is the next prime minister causes so much resentment that it is a safe bet that he whom he backs could not possibly succeed.

But when all this is not explained in public as and when it happens, a sudden crisis like now, over his going on leave and if he would resign as well, creates an unnecessary stir. But the rumour is clear on this - in due course, Dr Mahathir will be finance minister, while a dark horse, whom I shall not name now, will be economic adviser and eventually finance minister.

But are these rumours? Well, yes and no!