Wain: Dr M caused country’s woes

CheckmateA1 SG

May 21st, 2010

By Lee Wei Lian from The Malaysian Insider

The author of a hot-selling political biography on Tun Dr Mahathir Mohamad said many issues hampering Malaysia had come from the ex-prime minister’s tenure.

Former Asian Wall Street Journal editor, Barry Wain, whose book “Malaysian Maverick: Mahathir Mohamad in turbulent times”, sold 4,000 copies in just two weeks added that he does not see any broad changes being brought about by Prime Minister Datuk Seri Najib Razak.

“I argue that a lot of problems in Malaysia stem from Dr Mahathir’s rule,” said Wain in an interview yesterday, during a reception to celebrate the launch of the book. “Issues like corruption did stem from when he was in power. Lack of leadership, abuse of the NEP (New Economic Policy), problems that exist today.”

Wain, who was a Malaysia correspondent from 1977 to 1979 and has been in Asia for 38 years, said it was “quite obvious” that Malaysia has fallen behind other countries because of abuse of the controversial race-based NEP and that he was still waiting to see substantial reforms.

“I don’t see any broad changes at all,” said Wain of Najib, who is the country’s sixth prime minister and son of the second premier, Tun Abdul Razak Hussein.

Wain noted, however, that during the middle of Dr Mahathir’s tenure, Malaysia was one of the fastest-growing developing economies. And with 10 years of GDP growth above nine per cent, there was not a sense of concern at that time over where the country was heading under Dr Mahathir.

The reason why Malaysia was still lagging behind advanced Asian economies such as Singapore, Hong Kong, Korea and Japan even after all the rapid growth, according to Wain, was that the fast economic growth masked problems such as cronyism and the merging of politics with business.

“The great influx of cash hid that Malaysia was becoming uncompetitive,” he noted.

The book is a result of two-and-a-half years of research and interviews spread out over three years.

Wain also refuted reports that Dr Mahathir had seen a draft of the book before it went to print.

“That’s not the case,” said Wain. “I would never agree to an interview (with Dr Mahathir) if he imposed a condition to see the book before it goes to print.”

The book was launched in Asia in December last year but the Home Ministry only approved it for sale in Malaysia last month, which led to many Malaysians buying the book in Singapore or downloading pirated copies from the internet.

Due to the success of the book, another 5,000 copies are being printed for Malaysia and the book’s distributor, UBSD Distribution Sdn Bhd, expects sales to hit 10,000 by the end of the month, a high figure given the non-fiction nature of the book and its price.

“This is the first time that bookshops lined up at the warehouse to get the book,” said UBSD executive director Christopher Toh.

It is learnt that Malaysians had previously crossed the Causeway to Singapore to buy the book at bookshops in the island republic. – The Malaysian Insider

http://www.temasekreview.com/2010/05/21/wain-dr-m-caused-country%e2%80%99s-woes/

angel7030 SG

wait, i finish man in white first..then see how...

Hugh Hefner SG

Yes, he has produce the lazy mentality in his country (not directed racially). But his policies help insulate the country from devastating effects of subprime, speculation and derivatives. Malaysia only allows a certain extend of derivatives.

Vote PAP OUT to Save SG SG

EJ: Possibly part of their strategy is not to allow their currency to appreciate against the dollar, except gradually over time as part of their policy to restructure their economy to be more internal-demand driven.

MH: There are two traditional reasons for a currency to appreciate. Most discussion in the United States oversimplifies the issue by reasoning as if the balance of payments is only for imports and exports of goods. Most economists shy away from confronting the main dynamic pushing America’s balance of payments into deficit in recent decades: U.S. military spending abroad.

Americans are throwing off dollars by ringing China and Russia with military bases all over Asia. So by financing the U.S. payment deficit – by buying Treasury bonds to finance the federal budget deficit, which itself is largely military in character – China is financing its own military encirclement.

The second reason for the dollar’s weakening is the huge capital outflow from the United States. American money managers are bailing ship like rats, putting their money in Third World countries and trying to move as much into China as possible – largely to gain on the anticipated dollar depreciation against the renminbi.

China can turn around and say, “You’re creating money on a computer keyboard as free credit, and trying to move billions of electronically created dollars into China on a leveraged foreign exchange bet. But we have to earn our foreign exchange by our labor. You’re trying to force our currency up with your own flight capital. This is not a good economic reason for our currency to be forced up. If it rises, it should be for real economic reasons having to do with trade and tangible capital investment, not for a purely speculative wave. That is what caused the Asia crisis in 1997. We’re not going to let it happen again.”

So essentially they’re saying, fool me once, shame on you; fool me twice, shame on me. They’re not going to fall for the U.S. currency-raid ploy a second time. So people like the Paul Krugmans and Tim Geithners of the world are being rejected by China’s policy makers. They see them as hatchet men pushing junk economics and they’re not going to fall for it. The words I hear over there are, “These guys are full of shit.”

EJ: I think most people probably forget that during the so-called Asian current crisis, Taiwan and China were among just a handful of countries that were immune because they quickly implemented capital controls.

MH: Malaysia did the same thing. Prime Minister Tun Mohammed Mahathir and his advisors prevented foreign speculators from buying domestic currency. As a result, they couldn’t cover their short sales. They sold the currency short, but then they couldn’t buy it to cover their open positions. So it actually was forced up. George Soros claimed (I don’t know if it’s true) that he actually lost money in Malaysia.

EJ: I’m hearing that there is a growing consensus in Asia to start unwinding the large defensive currency reserves that they’ve built up since Greenspan went there in the early 2000s and said: “Here’s how to prevent a recurrence of the Asian crisis, just keep a year’s worth of foreign reserves.”

MH: I can’t tell you the contempt they have for Mr. Greenspan. They realize that what he was telling them was a deliberate falsehood. They know very well that he knows that the purpose of having a country build up reserves is to that provide a pot of gold to be looted by raiders.

EJ: I’m hearing that if there is another similar crisis, every Asian country will just do as Malaysia did in 1998. They’ll all apply currency and capital controls.

MH: Not only capital controls. Any future raid will be regarded as tantamount to military hostility. There will be a political break from the West. They will say, “This is it. We’re instituting the Asian doctrine: Asia for Asia. Get out of here, military bases and all, or we’ll drive you out. If you don’t, we’re going to have to do just what you would have done if we established a military base in Cuba.”

EJ: It sounds to me like you are expecting major geopolitical changes in China and Asia over the next few years.

MH: America is so self-destructive and so dominated by junk economics that when it goes abroad it leaves foreign officials open-mouthed in amazement. Then they realize that these people have been carefully picked precisely because they are so short sighted. America picks diplomats who believe the party line that feeds into its strategy. But it should confine them to the public relations department, not let them operate as people who actually do the thinking about economic policy.

http://michael-hudson.com/2010/05/trouble-in-europe-china/

Once the IMF got control of South Korea, one of the strongest industrial economies in the world, it demanded breakup of large industry conglomerates, charging "corruption" and "crony capitalism."

In fact, Washington hoped to weaken a growing competitor and open the door for US companies like GM or Ford to take over. In part it worked, until Korea and other regional economies were strong enough to re-impose national controls.

Malaysia openly defied the IMF demands and imposed currency controls during the crisis. The damage to Malaysia was minimal as a result, a great embarrassment to the IMF.

http://www.serendipity.li/hr/imf_and_dollar_system.htm

angel7030 SG

the American hates mahatir the most, he is the only one during the asian crisis who is able to stand up to the IMF soliciting malaysia to borrow, but instead of borrowing, which ultimately will become a burden for malaysia to listen to IMF which is controlled by the west, he shut the whole door, leaving foreigners holding stock in malaysia with nothing left....most uncles and aunties, including my grandma and father hated him, but on the other hand, he really know how to protect his country well, and evaded the IMF hands. He even banned a few western players to enter and trade in malaysia, one of them is George Soros, who single handed destroy the thai baht.