Monday, December 20, 2010

1997 Asian Financial Crisis

EIR: How and when was the decision made to impose the emergency controls on Sept. 1? What effect have they had? Even in mid-December, the IMF World Forecast conceded that they had had some success--that Malaysia has fared better under those controls than the countries that had gone along with the IMF policies.

Dr. Mahathir: We found that our appeals to the international institutions to curb currency trading failed to incite any response at all. They did nothing. And our currency kept on going on down and down, and that had a very bad effect on our economy. And as I said just now, we were going to go bankrupt--the whole country would go bankrupt--if we were to wait for the IMF to curb currency trading.

Since they are not going to do it, we had to do things for ourselves. And the only thing we can do is to stop our currency from getting into the hands of the currency traders. That means making the currency only legal tender within the country. Outside the country, it is worth nothing, and it cannot be brought back. Once it goes out of the country, it cannot be brought back. And that stopped the currency traders from devaluing our currency, and at the same time, of course, we stopped the trading of our shares outside our markets. They were being traded in Singapore, and the idea was to force the share prices to go down so low that once we asked the IMF for help, and the IMF insisted we open up our country, then they can come in and pick up all the companies at rock-bottom prices. So we had to decide to do things for ourselves, because we cannot expect the international community to do anything for us.

source :

Volume 26, Number 8, February 19, 1999

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