Accessibility links

World: Malaysia's Minister Criticizes Global Financial Community

  • Robert Lyle

Hong Kong, 22 September 1997 (RFE/RL) - Malaysia's outspoken and colorful Prime Minister Mahathir Mohamad set the global financial community on its ear in Hong Kong on the weekend when he blamed currency traders, the global financial institutions, and certain rich countries with conspiring to keep developing nations poor.

Speaking to a forum sponsored by the International Monetary Fund (IMF) and the World Bank as part of the lead-up to their formal annual meetings, Mahathir said the developing nations in East Asia have been aiming high to raise the living standards of their people but that "the old beggar-thy-neighbor instinct is still around, is still the guiding principle of a group of ultra-rich people."

He said Malaysia and its neighbors listened to all the advice to open markets, permit foreign currency traders to operate, even stayed away from big projects of needed infrastructure.

The result, he said, is that currency speculators are "becoming very, very rich through making other people poorer," and he urged that this "unnecessary, unproductive and totally immoral" activity be made illegal.

Currency trading, he said, should only be allowed to conduct real trade between nations and for real investment a countr's economy.

U.S. Treasury Secretary Robert Rubin, who was a currency trader and speculator before joining the American government, declined to react directly to Mahathir's comments, but said that as a general rule currency speculation is an "integral part" of the global economy.

Virtually unnoticed in Mahathir's remarks were his comments that perhaps Malaysia can serve as a better example than North America or West Europe for all the former communist nations looking to develop market economies.

The centrally-planned system had always seemed easier, he said, but "we all know socialism and communism failed." Still, when these nations now look to the U.S. and the EU (European Union) they "feel that the free market economy is beyond their capacity to manage."

When the former communist countries see a country like Malaysia, a former colony of Britain, 40 years ago very much like them, said the prime minister, "they feel more confident that they can do the same."

Malaysia and its developing neighbors have not been able to spend as much money as the rich aid-giving countries to help Central Asian countries, he said, but they can be more effective.

One thing needed is to find ways to link all the nations of Asia, including Central Asia, in ways that will build the prosperity of all.

"We like to think big," he said. "We even have great ideas for bringing wealth to other developing countries."

Among his ideas is to link the railways of China, the Central Asian nations and East and Central Europe.

"Central Asia is landlocked and cannot develop because of that," he said. "Why cannot an ultra-wide gauge railway with trains of two kilometres be built, to move goods in and out of the Central Asian Republics?"

The Malaysian Prime Minister says with a rail link like that, the Central Asian nations "can prosper and the world will have another big market."

The always controversial Mahathir's remarks on the global rich people caused an uproar in Hong Kong where financial leaders from around the world are gathering. But it was almost impossible to find anyone who had heard his remarks on linking Asia.