Mr Nor Mohamed, a top trader who quit the central bank after a multi-billion dollar forex scandal in the 1990s, has to run for office because his last term as an appointed senator runs out in 2009. -- PHOTO: REUTERS

At 60 years old, Second Finance Minister Nor Mohamed Yakcop is making his debut in the March 8 general election which could test his handling of South-east Asia's third-largest economy.

An election win will enable him to keep his job as Malaysia faces slowing global demand and fierce Asian competition.

Mr Nor Mohamed, a top trader who quit the central bank after a multi-billion dollar forex scandal in the 1990s, has to run for office because his last term as an appointed senator runs out in 2009.

But his election could bring problems. No longer a technocrat, Mr Nor Mohamed could find it hard to resist pressures from Prime Minister Abdullah Ahmad Badawi's Umno party.

'Nor Mohamed may find himself facing a lot more requests for government jobs,' said Mr Khoo Kay Peng, who runs a local independent website of political commentary.

The unseen hand behind the country's economic policy for the last decade, Mr Nor Mohamed is regarded as a shoo-in for the Tasek Gelugor parliamentary seat in Mr Abdullah's home state of Penang.

Umno, or the United Malays National Organisation, hopes the Penang-born Nor Mohamed, the only child of a poor single mother, will strike a chord with voters in Tasek Gelugor, a sleepy hollow dotted by tiny wooden shops and dilapidated brick homes.

Mr Nor Mohamed has dismissed the idea that politics would colour government policy if he is elected.

'No change in economic policy. The good policy of the government will always continue,' he said recently.

But in a country where politics and business are almost inextricably linked, Mr Nor Mohamed's move into politics could alter fiscal policy and compromise his objectivity, critics say.

Politics has always loomed large over Malaysian business, largely through the New Economic Policy (NEP), an affirmative action policy that favours the majority ethnic Malays in jobs, education and business.

The politically powerful ethnic Malays make up more than half of the population of 26 million.

'The NEP is a reality in Malaysia and so government contracts will tend to be given more to a certain community,' Mr Khoo said.

Umno is heavily influenced by cash-rich builders and businessmen who have the power to make or break the fortunes of top politicians. Significantly dependent on state projects, these builders are known to aggressively lobby for government jobs.

State contracts are a touchy subject, as Mr Abdullah found out. Shortly after taking power in 2003, Mr Abdullah pulled some large state building jobs off the table to trim public spending.

His decision angered many Umno members and sparked an outcry that threatened to split the party, forcing him to recant.

Nothing ventured, nothing gained
Known to be decisive, Mr Nor Mohamed has taken some big gambles. Best remembered for pegging the ringgit and losing billions of dollars in currency trade, he engineered capital controls that initially alienated Malaysia from foreign investors.

At the advice of Mr Nor Mohamed who was then the prime minister's adviser, Malaysia imposed temporary capital controls and fixed the ringgit at 3.80 per dollar to shield the economy from speculators during the 1998 Asian financial crisis.

The move wrongfooted many investors. But the government and some economists say the measures helped Malaysia recover more quickly from the crisis than some of its neighbours.

An economics graduate, Mr Nor Mohamed first worked as a central bank clerk. His rise through the ranks was halted when under him, the bank lost almost US$2 billion in 1993 in currency trades.

He left and was later appointed economic adviser to the prime minister in 2000 until early 2004.

Tasek Gelugor locals hope Mr Nor Mohamed can invigorate their rural area. But not all are rooting for him.

'Umno has been here a long time,' said fishmonger Zulkifli Othman. 'It's time to give someone else a chance.' -- REUTERS