News from this part of the world-system (Malaysia
and Singapore).
P.S. Currently, regional financial markets and
currency markets are in turmoil.
We are also choking from hellish cross-border
pollution (over 100 fires burning in Sumatra and
Kalimantan. Aggravated by El Nino)
------- Forwarded Message Follows -------
To: sangkancil@malaysia.net
Date: Tue, 23 Sep 1997 20:51:02
Subject: [sangkancil] Damage Control by Anwar (fwd)
From: pillai@mgg.pc.my (M.G.G. Pillai)
Reply-to: pillai@mgg.pc.my (M.G.G. Pillai)
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FORWARDED MAIL -------
From: pgdap@pc.jaring.my ("Balasundaram K.")
Date: 22 Sep 97
Originally Posted On: jaring.general
No change to currency trading, says Anwar
(SINGAPORE NEW STRAITS TIMES 22.9.97)
By Ravi Velloor,
in Hongkong
MALAYSIA hastened to assure the financial world yesterday that
it had no intention to roll back its open currency system, a day
after Prime Minister Mahathir Mohamad appeared set to ruffle regional
markets again by suggesting that a ban on currency trading was in
order.
Speaking to reporters at the annual International Monetary
Fund-World Bank talks, Deputy Prime Minister Anwar Ibrahim, who has
direct charge of the finance ministry, said that Kuala Lumpur had no
plans in that direction.
"There is absolutely no change insofar as the rules and
regulations regarding foreign exchange trading in Malaysia," he
said.
"What Dr Mahathir meant was that there was an urgent need
to study the adverse, negative implications due to excessive
speculation on the currencies." He said he expected no
negative reaction in the financial markets to the PM's remarks.
He said that he had spoken to Dr Mahathir to clarify the
matter, and added: "I am now saying clearly that there is absolutely
no basis in suggesting that we are changing rules and regulations
relating to the currency trading practice in Malaysia."
Dr Mahathir had called for a ban on currency trading in a
keynote address delivered here on Saturday, and in an exclusive
interview with the Sunday Morning Post newspaper, he said Malaysia
would ban currency trading since it brought the country no benefits.
He was quoted as saying: "We have decided it cannot go on
because there is no benefit to it. Why should we allow something
which is damaging to us? Currency trading will be limited
to financing trade."
In the interview, he said that recent events in financial
markets called for a re-examination of financial liberalisation in
Asia-Pacific Economic Cooperation (Apec) nations and the World
Trade Organisation (WTO).
Yesterday, billionaire investor George Soros, the man Dr
Mahathir has blamed frequently for much of Malaysia's troubles,
slammed the Malaysian leader for his suggestion on banning currency
trading and said he considered Dr Mahathir to be merely playing to
the gallery.
"It does not deserve serious consideration. Interfering with
the convertibility of capital at a moment like this is a recipe for
disaster. Dr Mahathir is a menace to his own country."
The US-based financial guru, who had said before his trip
to Hongkong that he felt beleaguered by the personal attacks
directed at him from Malaysia and Thailand, went on the offensive
against Dr Mahathir yesterday, referring to him as a "loose cannon".
"Dr Mahathir is using me as a scapegoat to cover up his
own failure. He is playing to a domestic audience."
Mr Soros, 67, used the opportunity to return to a theme he
had stressed earlier this year: that current global capitalism and
its laissez-faire ideology was proving to be dangerously deficient
and needed checking.
"The capacity of the state to look after the welfare of its
citizens has been severely impaired by the globalisation of the
capitalist system which allows capital to escape taxation much more
easily than labour," he said.
"The laissez-faire idea that markets should be left to their
own devices remains very influential. I consider it a dangerous
idea. The instability of financial markets can cause serious
economic and social dislocations."
He also took a swipe at the concept of Asian values, saying
that these were a "convenient pretext for resisting democratic
aspirations".
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