Anwar was born in the northern Malaysian island of Penang. In 1974, he was arrested during an anti-government protest and spent twenty months in jail.
In 1982, Anwar, the founding leader of youth Islamic organization called ABIM, shocked his liberal supporters by joining the United Malays National Organization (UMNO), led by Mahathir who had become prime minister in 1981.
Anwar moved up the political ranks and was appointed finance minister in 1991. In 1993, he was made made deputy to Mahathir. For several months in early 1997, Anwar was acting prime minister while Mahathir took a two-month holiday.
As the 1997 Asian financial crisis unfolded, Anwar responded to the demands of the IMF for a fundamental restructuring of the economy and opening to greater foreign investment and competition. As Finance Minister, he instituted an austerity package that slashed government spending by 18%, cut ministerial salaries and deferred major investment projects. These measures aroused bitter opposition from Mahathir and his circle, whose business empires had developed through government contracts, cheap credit, concessions and protection from foreign competition. Many Malaysian companies were facing the threat of bankruptcy, but Anwar declared: "There is no question of any bailout. The banks will be allowed to protect themselves and the government will not interfere." Anwar was an advocate for a pro-free market approach sympathetic to foreign investment and trade liberalization, whereas Mahathir favored currency and foreign investment controls.
At the annual meeting of the UMNO in June of that year, a book, 50 Dalil Kenapa Anwar Tidak Boleh Jadi PM ("50 Reasons Why Anwar Cannot Become Prime Minister"), containing graphic sexual allegations as well as accusations of corruption against Anwar was circulated. Shortly thereafter, Anwar obtained a court injunction to prevent further distribution of the book and filed a defamation complaint against the author but Mahathir apparently began strengthening his control over the party and making moves against Anwar.
In July, a visit by the Indonesian opposition leader Amien Rais led to more pointed comparisons of Malaysia and Indonesia. Domestic critics accused Mahathir of tolerating cronyism, and the international financial press and the International Monetary Fund (IMF) demanded greater transparency in government and UMNO-managed enterprises.
In August, police charged the author of the 50 Reasons book with malicious publishing of false news. But in September, the judge who had banned the book's distribution was transferred, raising concerns among Malaysian lawyers about the independence of the judicial system.
On September 2, 1998, Anwar was fired from the Cabinet, amid police reports that he was under investigation. On the 20th, he Anwar led tens of thousands in a protest march in Kuala Lumpur demanding reformasi (economic and political reforms) and Mahathir's resignation. Anwar's attacks on the nepotism of Mahathir's rule were fortified by widespread discontent over growing social inequality and the decades-long suppression of democratic rights in Malaysia. He was arrested several hours later. On September 29, Anwar appeared in court, bruised and with a black-eye, and pleaded innocent to charges of sodomy and corruption, charges which many believe were trumped up. The national police chief later admitted to beating him.
In separate trials, Anwar was sentenced to six years in prison on April 14, 1999 for corruption and nine years prison for sodomy on August 8, 2000. The sentences were to be served concurrently. In November that year, he was hospitalized for a spinal injury he claims resulted from the beating by police two years ago. Mahathir has refused to allow him to leave the country for medical treatment for the injury.
The following year, his corruption conviction was upheld by Malaysia's Court of Appeal. In July 2002, Anwar lost his final appeal against the corruption conviction in the Federal Court.
In a speech during the proceedings against him, Anwar explained why he what he believed to be the underlying motive behind his persecution. He told the court: "I objected to the use of massive public funds to rescue the failed businesses of his (Mahathir's) children and cronies."