Tuesday, 18 September 2012

Artikel Tun Mahathir dalam Financial Times

Tun Mahathir dijemput untuk menulis pendapat tentang bagaimana barat perlu selesaikan masalah ekonomi mereka oleh Financial Times pada 11 January 2012. Realitinya, teknik Tun Mahathir dikeji Anwar Ibrahim dan rakan baratnya termasuklah Financial Times sendiri pada 1997. Akhirnya barat menerima teknik beliau pada 1997 adalah tepat sekali dan menjadi contoh di barat sekarang terutama dari segi regulasi institusi kewangan dan kawalan modal untuk menyelesaikan ekonomi mereka dan Tun Mahathir juga dijemput untuk menulis di majalah antara paling berprestij di dunia ekonomi iaitu Financial Times. 

Aku paling nak ketawa dengan Lim Kit Siang, mengamuk sakan dia bila Financial Times jemput Tun M untuk menulis … hahaha. Sorila apek, lu memang fail dari dulu lagi, lu kecoh suruh Melayu balik kampung, last2 Cina punya business hilang customer Melayu, banyak lak tu, banyak tutup kedai. Lepas tu lu kecoh jambatan Pulau Pinang membazir, akhirnya ekonomi jadi bagus untuk Penang, last2 lu jugak pakai itu jambatan. Lu memang tak pandai ekonomi la apek, tu pasal Financial Times tarak jemput sama lu. Gua ingat orang Cina semua terror ekonomi, rupanya salah, lu memang fail, hahaha …

Antara kandungan artikel Tun M itu ditekankan konsep "Back to Basic" iaitu kembali kepada asas. Ini adalah konsep yang sama dari 4 Perdana Menteri iaitu Tunku Abdul Rahman, Tun Razak, Tun Hussein dan Tun Mahathir. Dan keempat - empat PM ini mempunyai tok guru dan penasihat yang sama iaitu Tun Tan Siew Sin. Tun Tan Siew Sinlah yang banyak menekankan konsep "Back to Basic" semenjak zaman Rancangan Malaysia Pertama (1966). Beliau berkhidmat sebagai Menteri kewangan kepada 2 PM, dan Penasihat kepada 2 PM selepas tu.
Berikut adalah artikel tersebut ;

The Malays have a saying which inter alia means that when you lose your way, go back to the beginning and start again. I believe that everyone has lost their way in handling the current financial crisis. The west in particular needs to rethink some essentials.

The world is still Eurocentric: how Europe handles the financial crisis is of universal importance. But I have serious doubts about Europeans’ “infallibility”. I particularly dislike their double standards. Centuries of hegemony have convinced them they know best what is good for the world: their values are to be accepted as universal; Asian values are deemed irrelevant.

This explains the simplistic solutions offered to east Asian countries when currency traders impoverished them. Malaysia was told to raise interest rates, have a surplus budget, allow distressed banks and businesses to go bankrupt, etc. This was the formula for all. Yet when America and Europe faced their financial crisis, they did everything they told Malaysia and east Asia not to do. While these measures worked for Asia, they are not going to work for the west.

For Europe for much of the past two centuries, capitalism has had a clear and straightforward narrative. For a long while Europe’s manufactured products lined the shelves of the world’s markets. They monopolised and dominated world trade and business. Their people enjoyed the highest standards of living. This increase in European growth and wealth would have gone on indefinitely. But after the second world war Japan industrialised and produced cheaper yet good quality goods. Then Taiwan, South Korea and China got in on the act. Rapidly the Europeans lost their markets.

Unable to compete, the Europeans and particularly the Americans opted for the financial markets. Inventing new financial products such as short selling of shares and currencies, subprime lending, securitisation, leveraged investments through hedge funds and a multitude of others, they apparently continued to grow and prosper. But the finance market spins off no real businesses, created hardly any jobs and gave rise to no trade. Getting greedy, they abused the system, manipulating the market for greater profits.

In Hong Kong in 1997 I spoke at the meeting of the International Monetary Fund and the World Bank and I blamed the financial crisis in east Asia on currency trading. I told them currencies were not commodities and should not be traded. But the World Bank and IMF did not care. They even accorded currency traders such rights as not having to be transparent and not paying taxes. They gave these exemptions in the name of free trade, and yet others had to be transparent and to be subjected to regulations. We concluded that their recommendation would bankrupt us and make us dependent on their loans.

I was condemned for my criticism of currency trading. But the exploitation and abuses of the financial market could not last forever. In 2008 the bubble burst. Banks, insurance companies, investment funds and even countries went bankrupt. But for its position as the currency for trade settlements, the dollar would be worth almost nothing.

Just as in the east Asian countries earlier, America and Europe became poor. The refusal to accept their impoverishment has resulted in their refusal to accept austerity measures. Their people demonstrate and go on strike against the measures. This simply aggravates matters.
Asian countries behaved differently. When they became poor because of the devaluation of their currencies they lived within their means. Some countries went to the World Bank and the IMF but Malaysia fixed the exchange rate and prevented the currency traders from accessing the ringgit. We were told our economy could collapse, that no one would lend us money, and we were warned of dire consequences. But nothing like that happened. Malaysia recovered faster than the rest.

The others also recovered because people actually gave money and jewellery to their governments to help pay debts. The workers worked harder and accepted living with lower standards. The only way for the European economies to recover is to admit that they are now poor and live within their means. Then they must go back to doing real business, ie to produce goods and sell services. Wages, bonuses and other perks have to be lowered to become competitive. In addition the financial market should be overseen and controlled by the government. Many financial products should be strictly regulated if not banned.

A new “Bretton Woods” should be convened with adequate representation from the poor countries. It should consider a trading currency based on gold, against which all other currencies should be valued. The fluctuation of the price of gold would be minimal. Business would be exposed to less uncertainty. Governments should fix the exchange rate based on gold or economic performances. There should be no trading in currencies.
Banks should be better regulated and new rules made to prevent excessive leveraging, limit loans and stop subprime lending. The financial system should be standardised and should support real business. These measures will take time, but will ensure that the kind of crisis the world is going through is less likely to recur.

There can be no return to the status quo ante. Europeans have to accept the days of Eurocentricism are practically over. Europe must look to the east as well for solutions.

The writer was prime minister of Malaysia from 1981 to 2003 

Blogger Wenger J Khairy menulis komen di bawah artikel ini ;

Wenger J Khairy | January 20 3:39pm |
Hi All,

I am a Malaysian and I do not like Dr. Mahathir. His style of government stresses form over substance, and unfortunately till this day he continues to cast a long shadow over Malaysian politics through the use of Perkasa - a Malaysian Non Governmental Organization whose politics are not dissimilar to that of the British National Party.

In the above article, Dr Mahathir does what he does best - sandwiching lies and truths together in the same sentence. However, if we were to properly de construct his argument we would be able to see the truths for what they are and the lay bare the many lies sprouted.

In the period leading to the Asian Financial Crisis of 1997, Malaysia, like many other South East Asian countries experienced an influx in foreign capital, both in terms of Foreign Direct Investment (FDI) and portfolio investment. This caused an appreciation of the Malaysian Ringgit and the creation of asset bubbles, especially in the stock market. Shares were being traded at ridiculous valuations, and businessmen, prompted by Dr Mahathir's grandiose visions took on billion ringgit loans for real estate development and to finance acquisitions. However, instead of matching Ringgit assets with Ringgit liabilities, they borrowed heavily in US dollars instead, as the US dollar interest rate was lower and they did not understand a thing about the relationship between currencies, economies and interest rates, and had grown rich and fat not by their own ingenuity but by rather through patronage. In most cases, these folk used their shareholdings in public listed companies as collateral for these loans.

After the Thai Baht collapsed in May of 1997, foreign investors in Malaysia were genuinely spooked and began to liquidate their positions. At the same time, some of the major hedge funds had seen the relationship between the currency, the economy, the banking system and the stock market and began to simultaneously short the market as well as short the Ringgit. This further added to the uncertainty and the KLSE ended the year 50% lower than its pre crisis values.

At that time, the World Bank & IMF advised Malaysia to impose high interest rates and pursue fiscal austerity. The strategy was misguided because when demand had collapsed, even a school kid would tell you, that someone needs to pump prime the economy. Furthermore, high interest rates cripple the economy and even though in theory it makes it more expensive for speculators to borrow in ringgit, it also forces the economy into a tailspin, which on balance, would create a greater negative pressure on the currency.

Thus Dr Mahathir was right in rejecting the IMF advice and adopting a Keynesian economic policy. Money supply began to expand and the country gradually recovered.

However, the cronyism, the patronage and all the rot that had caused the Malaysian economy to fall like a deck of cards continued unabated. It took his successor, Dato Seri Abudallah Badawi, several years to restore order by strengthening the banking system. Under his successors stewardship, the banking system was extremely resilient and weathered the Global Financial Crisis without a hitch, when one could argue, had Dr Mahathir continued to be in charge, Malaysia would have faced yet another economic crisis.

I hope this gives a clearer picture of the actual situation. From my reading, I would caution anybody in thinking that Dr Mahathir enjoys significant support here in Malaysia, apart of course from those who grew rich under and through him.

Komentar dari pembaca lain ;

Melvin | January 15 2:40pm | 

This man is trapped in a timewarp of his own making. His much-vaunted Vision 2020 for Malaysia proved to be hollow, shallow and founded on a total misreading of reality. Mahathir considers himself a "realist" - yet the only reality he knows is the fang & claw of Darwinian survivalism. In his overlong and heavy-handed career as Malaysia's 4th prime minister, Mahathir singlehandedly corrupted the police force and civil service, castrated the judiciary, and incarcerated Anwar Ibrahim - the most outstanding political figure the nation has ever produced - on a spurious and malicious charge of sexual deviancy. Almost every Malaysian I meet has expressed weariness with hearing this old turkey buzzard pontificate on every issue, thinking his opinion still counts for anything. My Malaysian friends say: "We'll dance on his grave sooner or later!" 

MukengeRC | January 16 4:19am | 


It remains that Mahatir saved his people a lot of misery. I don't know what kind of Malaysian friends you have but they are certainly not fit to rule Malaysia. Period. Mahatir won't dance on their grave for the simple reason that they are nobodies. 

Hawkeye | January 13 2:45pm | 

In te late 1980s when the Far East ws hit with an economic crisis, Malaysia brought in Echnge Control. My friends in the busines community were very pleased as there was a degree of stability.

I was struck by the anger expressed in the West in the form of leadng articles in all the leading press media that I was familair with. Thus the Times ranted against Prime Minister Mahathir. So did the US Newsweek ad the time Magzine.

Hoever, as the Prime Minister said, Malaysia was the first country to recover. Countries like South Korea, Philippines and Indonesai saw their ealth gobbled up at fire-sale prices by the West through the IMF before hey evenually recovered.

Personally what \i learnt from that episode is that the Wet does not always have the right answers.

Solutions suggested by the West tends t serve the West to the deriment of the countries accepting their advice. This is no surprising as why sould the Wst behave otherwise whenit is a case of eveymen for himeself.

I can see that the crisis in capitalism in Europe at present is a case in point. Some months ago, Sarkosy thought he could sell European debt to the Chinese. How wrong was he. His team came back from China with nothing but their begging bowls.

Europe has to learn and realise that it can no longer pool the wool over the eyes of Asians. The only way to solve the problems of Europe and the Us is a proper dose of austeity measures. It will be painful but unfortunately, that is the only way.

It was not so long ago that the US writer could pen The End of History. Is he likely to pen The End of European Capitalism? Me thinks not. 

Softcapitalist | January 13 1:39pm | 

Very good article Mr Mohamad. An unpleasant reading for a lot of people (e.g. AntiMOE) but it brings out some very good points.

Obviously, the modern success of the West has been consolidated by excellent education and public institutions.No one could argue that a society can progress through corruption and lawlessness. Let's recall the first decent laws in Britain were introduced by the Romans; the world managed to survive in harmony before the Declaration of Independence, so it would be yet another example of arrogance to say the Anglo Saxon institutions are unbeatable.

When it comes to the colonialists' legacy, the story is embarrassing and deplorable.

The West's sense of entitlement and feeling of superiority needs to be brought down to common sense. Unhypocritical support offered on mutually beneficial basis should stay at the foundation of both trade and diplomacy. The West still has the tendency to demand larger dividends from its relationships.

The trouble with the West's political class is they are a crowd of nimbyies, already surpassed by history, and so far submerged in the thickest denial. 

Londonner | January 12 11:22am | 

I don't think you can deny MM the opportunity to gloat a little bit when you consider what the West/IMF tried to do to his country - Whether on purpose or unwittingly. He makes a good point, perhaps too bluntly: We're still arguing over the nuances of wholely inadequate reform of our economies and the position of the financial markets within them. The tail is still wagging the dog. The sooner we take a more radical action and as part of that accept either a better distribution of income, or lower absolute incomes, probably both, the sooner we'll be able to compete.

It's shameful that the FT has given so much space to Soros and that this is the first time we've heard the counter. I don't agree with MM's reactionary domestic populism, but on the matter of neutering the financial industry he gives a useful kick. 

SA boykie | January 12 8:58am |

Awesome article!! 

Itzman | January 12 9:57am | 

How come it takes a Malayan ex prime minister to state the bleeding obvious. When all the economist's cant see it? 

RR-3 | January 12 1:50am |
Amazing FT has invited MM! One of most successful prime ministers of modern times.
Admire him and agree with his views 

Adam Bartlett | January 11 5:05pm |

Thanks for this. In the early 20th century, it was thinkers from Eastern Europe who were telling the West to go back to their Capitalist basics - the so called Austrian school.

Thank God the advice from the East is now much sounder, the specific policies youre asking us to re-adopt are basically Keynesian. At least in some areas like capital controls, consensus opinion in the West and the rest of the G20 has finally caught up with the bold and effective path finding you demonstrated for Malaysia back in 1998.

Go Asian School! 

Umbrian Misanthrope | January 11 4:59pm |

Is this the same Dr Mahathir who unleashed the first aggressive financial deregulation programme in south-east Asia in the 1980s? Which led to Malaysia having a stock market 3.5 times the size of its GDP and no one in KL going to work any more. He didn't mention that earlier bit of policy making. 

MukengeRC | January 11 4:27pm | 

Mahatir Mohamad is right all along. I remember that when he decided to manage the ringgit, he was predicted all kind of catastrophes. Instead his move saved a lot of misery to his people.

Fractional banking and leverage are outright frauds. As are naked shorts. Usury is the game of the day. Not something to be proud about. Beside it is parasitism.

Europeans and Americans have better to understand that fast unless they will crumble down to misery for one or two generations. But I have no illusion. The dollar and the Euro are headed to oblivion. 

Vince Emmer | January 11 4:16pm | 

Mahathir Mohamad offers much to quibble with.

Nonetheless, I agree with his central point: The West (not just the Europeans) should accept that they've been living beyond their means. Adjusting to that will be difficult, but I believe it is inevitable - whether the west 'manages' it or not. 

Annapolis1785 | January 11 3:23pm | 

Congratulations to Mr. Mohammed for his recent court victory. Hopefully this will strengthen Democracy and Rule of Law in Malaysia. However, he should be aware that the era of "Eurocentrism" ended in 1918. However, the Eastern model of "cronycapitalismm" is not a sustainable model.

1 comment:

Related Posts Plugin for WordPress, Blogger...

Share this