|
|
This article appeared in the
February 19, 1999 issue of Executive Intelligence
Review.
On
Jan. 22, Gail G. Billington of EIR's Asia Desk and Dino de Paoli of the
Schiller Institute were given the opportunity to interview Datuk Seri Dr.
Mahathir bin Mohamad, Prime Minister of Malaysia, in his office in Kuala
Lumpur.
EIR: Your historic address to the 1997 IMF Meeting in Hong Kong
pinpointed the role of speculators, in specific, George Soros, in triggering
the assault on the regional currencies and stock markets in Asia. Coming from a
sitting head of state, many were stunned by your remarks and tried to minimize
them at the least. But the Asian and European editions of the Wall Street
Journal said that you got those ideas from EIR, even though the
Wall Street Journal did not publish the article in the United States,
because, if they had, it would have provoked an incredible uproar in the United
States.
A year and a half later, the consensus has swung around overwhelmingly in
support of what you said at that time, including agreement that the IMF's
medicine to deal with the crisis is worse than the disease itself. And I think
that this latest mea culpa from the IMF that, "yes, we were wrong," is
more than evidence of that.
What led you to deliver that diagnosis at the time and why do you think
others were so slow to recognize what you understood?
Dr. Mahathir: Well, when for the first time, countries decided to
float their currencies and allow the market to determine the exchange rates;
that was way back in the 1970s, I felt even at that time that the sovereignty
of countries had been lost, and when you leave it to the market, the market is
motivated entirely by profits--actually, greed--and you cannot expect greedy
people to act in a sensitive way. And if they can see how they can make money
for themselves, they couldn't care less if they destroy whole countries or they
impoverish people. So this thing has been in my mind for quite some time, and
when these things suddenly occurred in Southeast Asia, I thought that this is
what is going to happen, because they had attacked Mexico before, and we
thought we were immune, but now we can see that it has nothing to do with
fundamentals. It is just a question of the currency traders seeing an
opportunity for them to make money. That's all.
EIR: In that speech, you touched on a number of themes, which I'd
like to revisit. You said: "We had forgotten the experience of Japan and Korea,
when these two countries seemed about to catch up with the developed world,
things began to happen to them. We dismissed the rumor that Malaysia would go
the way of Mexico. We did not realize how close we were to a manipulated
economic crisis. We blithely sailed on."
Can you expand on what happened to Japan and Korea and Mexico, and what
lessons should nations draw from that shared experience, and how have you tried
to forewarn others, who might also "blithely sail on"?
Dr. Mahathir: Well, in the first place, Japan developed very fast,
and, in fact, Japan was developing at a time when the Western countries did not
believe that Eastern countries could actually catch up with the West, so Japan
was allowed. And then, of course, later on, when Japan appeared to be doing too
well all the time, the yen was revalued upwards in order to make Japan less
competitive. You can see that these are deliberate attempts to slow down the
growth in Japan.
In the case of Korea--because of the experience in Japan--the Eastern
countries, like Korea, can actually develop and catch up with the Western
countries. Before they could reach that stage, there was this idea about "newly
industrializing countries," NICs, this was coined in order to justify stopping
Korea from growing, and after that, of course, Southeast Asian countries, even
Malaysia, began to develop fast, and there seemed to be a fear that Eastern
countries might actually pose a threat to Western domination, and so something
had to be done to stop them. And, we think that one of the reasons for
attacking the currency is to stifle growth.
EIR: For some months after the initial shock, Malaysia successfully
avoided having to go to the IMF, but tight monetary policies were imposed,
within a continuing floating exchange rate regime. Why was that done, and what
price did Malaysia pay for the attempt to avoid having to go to the IMF?
Dr. Mahathir: Well, although we didn't ask for any loans from the
IMF, the IMF kept on coming here and telling us that we must do what they
wanted us to do, which means that in order to stop the currency traders from
getting hold of our currency, we must raise interest rates. We must squeeze
credit. We must force companies to go bankrupt by shortening the period for
non-performing loans, and because at that time the IMF had a lot of influence
over the then-Minister of Finance and the central bank, they followed IMF
conditions; and, as a result, the economy just went into a tailspin. Our
companies and banks were going bankrupt.
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.
EIR: You and other officials of the government have repeatedly said
that the controls will remain in effect until such time as the global problem
of currency speculation is addressed and remedied. In the fall of 1997, Japan
spearheaded a push for an Asian Monetary Fund, which idea is coming back now,
which met stiff opposition from the multilateral institutions and the G-7,
including the U.S. at the top. The focus then shifted to the so-called G-22
group, which came up at the 1998 Vancouver APEC [Asia Pacific Economic
Cooperation Forum] summit, but as recently as the Hanoi ASEAN [Association of
Southeast Asian Nations] summit and the APEC conference in Kuala Lumpur, the
Southeast Asian countries again affirmed that the G-22 provides a more
appropriate forum for such discussions, if not the ideal forum for that.
What are your expectations of the G-22 context, and what would you wish it
to accomplish that it has not yet accomplished?
Dr. Mahathir: The G-22 is a lower-level forum because it is made of
ministers and governors of banks; in fact, it should be subordinate to the
APEC, which is a meeting of the heads of governments of some of the most
powerful economies in the world. But it seems strange to me that APEC should
ask the G-22 to do what APEC should be doing, because the one thing that is
needed really is a decision to curb currency trading, and that decision can
only be taken by the most powerful economies in the world. And those people are
represented in APEC.
EIR: In June there is a G-7 meeting, where they are talking again
about the possibility of reform, or some kind of stabilization. Do you expect
anything out of this?
Dr. Mahathir: You see, we consider that their experience is
different from our experience. We were the subject of the attack. What happened
to the rich countries is that the instrument that they used for attacking us
got into trouble--the LTCM [Long Term Capital Management hedge fund] got into
trouble, and they lost money. And they are interested in stopping their loss of
money from their operations. We are interested in protecting ourselves from the
results of what they have done.
So, we are looking at the same thing, but from a different angle. My fear is
that when the G-7 tackles this problem, it will look at it from the point of
view of how to enable the funds to operate in a profitable way. In other ways,
we must not, for example, decide to control our currency, or, like Russia,
decide not to pay the debts. You see, that is a different thing. So I'm not
very hopeful.
EIR: Actually, we'll come back to the LTCM case, because there is
an interesting side to this, which hasn't been made public yet, but it has a
lot to do with corruption involving Al Gore and Viktor Chernomyrdin from
Russia. The LTCM case was used to bail out financial interests that Gore and
Chernomyrdin were very much tied into with this hedge fund operation, including
firms such as D.E. Shaw, which is--you talk about corruption, this is about the
highest level of corruption you can actually get to, so we'll come back to
that.
In regard to the G-22, you had said in November 1997 at the G-15 summit: "A
world trading system cannot rely on market forces. It is time that we draw up
fair rules for the marketplace. If we don't, then the fight for independence
will have to begin all over again, for the present market rules will surely
result in a new imperialism, more noxious and debilitating than the old."
Do you have anything more to say about the new face of imperialism for
developing economies?
Dr. Mahathir: It seems to me that more people now are realizing
that this is, in fact, a new kind of imperialism where the weapon used is
really capital--capital that can be used to impoverish countries to the point
where they have to beg for help and when they beg, then you can impose
conditions on them, and then one of the conditions, of course, is that you must
open up the economy and allow all the foreign companies to come in and operate
freely. And these foreign companies are huge companies, huge banks. They will
come and they will compete with the small firms and small banks, and these
banks will eventually fail and be absorbed by the big foreign banks, and we
will have no more banks of our own.
They are, of course, saying that we will get the best service, the people
with the most amount of money, but we will be just workers in foreign
companies. We will have no independence anymore, and as in the case of the
banana republics, when the economy is totally dependent on foreign-owned
businesses, they dictate the political future of the country. We have to
accept. If they don't like a person to become a President, for example, they
can mount an operation that will bring down that person, as they have done in
some countries. And this means that we have no more independence. You know,
when our politics is determined by foreign investors in the country, then where
is the independence?
EIR: Certainly under conditions in which foreigners actually ran
the banking system, then you wouldn't have any leverage to carry through on the
kind of capital controls you have imposed. They'd be dictating your whole
economy.
Dr. Mahathir: Yes, well, they just dry up the funds, and we have to
kowtow to them.
EIR: In early 1997, EIR, on the initiative of Mr. and Mrs.
LaRouche, launched a call for the convening of an emergency conference for
global monetary reform, going back to the best principles of the old Bretton
Woods system--fixed exchange rates, preferential credits for infrastructure
development, Marshall Plan approach for rebuilding economies, these ideas--but
also with the purpose of creating new mechanisms to finance such global
reconstruction. What do you thing of the idea of such a new Bretton Woods
conference?
Dr. Mahathir: I think it would serve a very useful purpose, because
we know that while the Bretton Woods convention was in force, the world was
growing at a very rapid pace, and, in fact, recovery of the world after the war
was largely due to the Bretton Woods institution, and, of course, the Marshall
Plan and all that. But if it was jettisoned, if it was done away with, it was
because some countries reneged on their commitments to the Bretton Woods. It is
not because of Bretton Woods itself, it is because somebody did not follow
Bretton Woods. So, there is no reason why you should just drop the Bretton
Woods system when, in fact, it has done the world a whole lot of good.
EIR: Are you referring to Nixon's decision?
Dr. Mahathir: Well, actually Nixon was involved, of course, but
this was somewhere in 1971-73, when one country at least decided to devalue
their currency and, therefore, did not stick to the Bretton Woods. And after
that there was this belief that if countries are not allowed to devalue their
currency, then they cannot survive, and, therefore, having a fixed exchange
rate will not be helpful for the world's economy.
EIR: In August of 1998, there was a series of events that brought
the question of the role of speculators very clearly into focus--Hong Kong
sprang a trap against the speculators targetting their currency; China moved
against speculators and, now, has moved to shut down the
speculation that had gone on with the GITIC corporation in Guangdong; and
Taipei declared that it was illegal for anyone to deal with George Soros in his
hedge fund operations. But in the middle of all this, the Russian crisis came
to a head with the temporary debt moratorium, and the subsequent shakeup has
brought in a number of Academicians around Yuri Maslyukov and others, who have
signalled that their priority will be to focus on reversing the terrible
collapse of living standards in Russia. How do you see this shift toward
greater regulation?
Dr. Mahathir: It has become obvious to everyone that you cannot
allow the market to determine how the international economy is run. If you
don't regulate, it would seem that the international economy will collapse; as
you can see, it has already spread from East Asia to Russia to Latin America,
and even to Europe and America. This lack of regulation is not doing anybody
any good at all, so I think even people in the United States are beginning to
think that there must be some regulation. Jeffrey Sachs, for example, talks
about regulation. Paul Krugman talks about regulation, and I think the idea is
spreading.
EIR: The Kuala Lumpur summit of APEC this past year seemed to be
the next opportunity to talk about "new global architecture," but was
significantly undercut by the absence of President Clinton, and his
substitution by Al Gore. But what did emerge out of that summit meeting was a
series of bilateral meetings and subsequent state visits involving China,
Russia, India, and Japan, which seems to identify a new correlation of
countries looking for how to address this situation, and redefining their
bilateral relations in this context of a concert of nations for reconstruction,
rebuilding of the financial system.
What do you think of this new degree of collaboration among the major powers
in Asia, but also in cooperation with ASEAN and what your nation has done so
far?
Dr. Mahathir: They are good in that they help us to focus on the
problem, but the main player is actually the United States because only they
can regulate currency trading because they are being operated out of the United
States. For example, the huge leveraged loans given to these funds come from
banks in the United States, and the amount is huge--20 times, even 200 times!
And only the United States can tell the banks, you must not lend such money
because you are risking money belonging to the people. If the United States
doesn't act, then, of course, the others can talk, but it is not going to have
any result. Unless, of course, now we have the switch to the euro, that will
reduce the dependence on the U.S. dollar.
EIR: The idea of global reconstruction that has come up around the
Eurasian Land-Bridge, I'd like to address that, because I know that this is
something that Malaysia has been very actively involved in. In your Hong Kong
speech of 1997, you very clearly identified the fact that Malaysia is looking
at this great project and global reconstruction, and you situated that in
saying that Malaysia likes to "think big--we even have great ideas for bringing
wealth to other developing countries. We proposed the development of the Mekong
Valley, beginning with the railway from Singapore to Kunming. We want to link
up with the railways of China, Central Asia, and on to Europe, but we are not
going to be allowed to do this because you don't like us to have big ideas."
And Malaysia calls this the "prosper thy neighbor" policy. And before this
crisis hit, Malaysia was very actively involved in a series of growth zones.
Where do those projects stand now, and what is the prognosis for getting
them restarted?
Dr. Mahathir: As far as the Mekong project is concerned, we are
progressing quite slowly. We have to do really very little, because already the
railway lines are in place. There are some breaks in the railway lines which
need to be put in place, and then we can have a railway line that stretches
from Singapore to Kunming in China, but the other part which I mentioned, the
trans-Central Asian railway, that requires very big investments, but these
countries are unable to develop because of transportation problems: We depend
too much on ship transportation, but railways have not been really exploited. I
think in terms of a huge railway network through Central Asia, even if it is
just first one line. We can have a train two miles long that can carry goods at
a very cheap cost across Central Asia. That will enable Central Asia to bloom.
It's an idea, and I don't think it will happen in my time, but people have to
think about such things.
Why not help people to become prosperous, rather than thinking of ways and
means of stopping from developing? Because, to me, what is being done now is,
to stop us from developing. We were growing at 8% for years and we could have
continued almost indefinitely, but this crisis has caused minus growth for us.
Not because of our doing, but because our currency has been devalued.
EIR: You have criticized the IMF very correctly, but do you think
the World Bank is doing enough in the direction of financing some of these
projects?
Dr. Mahathir: The World Bank has been more understanding, I must
say. They have lent us some money. We did not borrow from the World Bank,
because we thought that we could afford to do without it. But now, of course,
we need some money and they have lent us money. Unfortunately, the World Bank
seems to link their loans with something that is happening internally in
Malaysia, and they do this on the basis of their friendship with certain
people, and not on the basis of what is right and what is wrong.
EIR: At the Kuala Lumpur APEC meeting, Vice President Gore blamed
the Asian crisis not on speculation, but on "korrupsi, kollusi, and
nepotisme," and lack of democracy. He also was a very strong proponent
of "sustainability" versus great projects, but shortly after that--and this is
part of the problem with Gore having been here--Clinton went to South Korea,
and, for the first time that I recall, he said that the crisis was not the
fault of the Asian countries, but that when you have $1.2 trillion in currency
trading in any given day, it is out of the control of any single country to
address the problem. And previously he had, through [late Commerce Secretary]
Ron Brown, a policy of U.S. capital goods exports to Asia to help build the
infrastructure, power generation, in the kind of collaborative relationship
that we think is the direction that policy should go for the U.S.
Do you think it is possible for Asia to meet its goals in infrastructure
development without "thinking big"?
Dr. Mahathir: I don't know what is meant by "thinking big." We are
doing things because of real needs. For example, our requirement for
electricity is very big, and we have to have great projects, although it costs
a lot of money. We built a new airport because the growth was so great that we
needed a new airport, and you don't build an airport that is 10% bigger than
the last one. Because building an airport must require planning for 100 years,
because it is not easy to locate an airport. People object to having airports.
So I don't see why there should be focus on all these things. Although they
appear big, but they are also essential, and we could afford it.
Blaming these things for what happened to us is absurd. For example, if
there is corruption, it must have been there a long, long time. Why is it that
we grow? How is it that we became the "miracle" economies? And why is it that
only when the currency traders devalued our currency did the economy collapse?
How can you say this is due to the corruption of the government, when for the
past 20 years we have been growing steadily, much faster than any other country
in the world?
Surely, the government must be doing something right. But it only stopped
once the currency traders moved in, and that is why we blame the currency
traders, not the government. Yes, we are not perfect. Okay, find some other way
of making us perfect, but don't destroy us in order to bring about perfection.
We cannot understand this idea of "constructive destruction." You know, you
destroy us and you say that we are going to rise like a phoenix from the
ashes--it is absurd. You know, you destroy something, it is not easy to
rebuild.
EIR: Do you care to comment on what you see as the contradictions
in U.S. policy on this, and what kind of partnership with the U.S. would you
like for Malaysia to have?
Dr. Mahathir: I have this feeling that the U.S. never really
understands the East Asian problem. That is why you find contradictory
statements being made by the leaders of the U.S. They need to have a really
in-depth understanding of East Asia, our ambitions and our needs, and all that,
so that we can cooperate. We have nothing against the U.S. as a country, but
the U.S. government and, unfortunately, the media as well, tend to have a
distorted view of East Asia, as if we are trying to challenge the U.S. It is
not so. But we think we have a right to enjoy as much of a good life as anybody
else. That is all that we want, but you find Clinton saying one thing, Al Gore
saying another. At times they have good ideas, but somehow or other they get
shot down by others.
EIR: We have a Spanish-language edition of EIR, which
circulates in Ibero-America and has carried many of the statements you have
made over the last year and a half, and this has contributed in Ibero-America
to a very intense national dialogue, which we've seen reflected most
dramatically in Mexico, with a recent trip that Mrs. LaRouche made to Mexico,
where former President José López Portillo joined her at a
seminar. Earlier she was in Brazil this year, and I think that you can see from
the reflection of what's being said now about the Brazil crisis, that this
continuity of dialogue on these ideas is getting across.
In the Mexico meeting, President López Portillo actually, at a
certain point, advised the audience that they should "listen to the wise words
of Mr. LaRouche." In the United States, we are on a campaign to have LaRouche
brought in as the economic policy adviser to Clinton, to try to end this phase
of contradictions of which side of the mouth the U.S. is speaking from on these
economic issues. Do you have any comment on that proposal?
Dr. Mahathir: Yes, I think advice and discussions are very
important here because, firstly, we all need to understand what the problem is
all about, and we need to learn about each other's experience and how we tackle
the problem. So, this kind of contact must serve a useful purpose, and we would
welcome that certainly.
Unfortunately, of course, the words are passed around that the EIR is
a fascist grouping, which is trying to--this is told to me by some of your
detractors, including my former deputy, who told me earlier that EIR is
a fascist paper, so we shouldn't listen to it. So that is the way of
undermining any attempts on your part to try and promote the kind of ideas that
EIR has always been focussed on.
EIR: I think we can say that we've seen some common enemies in the
course of the last year and a half on these things. The press, the role of the
media in this situation, and the continuity of which press say what under
certain circumstances; I think it's a trail of evidence, if you will.
Let me add, we have been pushing these ideas since 1972-73 openly, so the
enemy began to attack us since that time with all kinds of bad names. Recently,
they treated you with certain bad names, too, so you can understand why they
use these bad names against opponents of the monetary system.
We've also paid a price. My husband [Michael Billington] has been in prison
for the last eight years. He was one of the people targetted in the political
prosecution of Mr. LaRouche and associates in the 1980s. It's a long story,
which I've been invited to address here on "human rights from an American
perspective." Another case concerns the political targetting of black elected
officials in the U.S.; roughly one-third of all black elected officials have
faced charges to stop a certain class of leadership from emerging in the U.S.
political spectrum.
EIR: The German poet Friedrich Schiller, who was the great
republican poet of Germany, once said that we must be at the same time patriots
of our own nation and citizens of the world. How do you see our responsibility
as world citizens, and how is that distinguished from interfering in the
sovereignty of other nations?
Dr. Mahathir: We believe in the, well, more or less the integration
of all the countries in the world. We believe in certain common values, but we
also believe that each nation should have a right to decide for itself, to
retain its own independence. There should be no country imposing its will on
the rest of the world in the name of universal values. These universal values,
as claimed by some, are not really universal, so we must be tolerant of other
people's ways of doing things. But at the same time, countries should not do
anything to harm other countries, which is why we always talk about "prospering
our neighbor." It is our own experience that when we became prosperous, those
who helped us, benefitted. Japan invested in Malaysia; we became prosperous,
and we buy more goods from Japan. If we are poor, we cannot buy from them, so
you prosper us, we prosper you. This is what we believe.
So, while we should look after our own affairs, we should also be interested
in our neighbors, as part of the global community. And, today, neighbors are
not only next-door neighbors; because of ease of communication, even the most
distant nation is a neighbor, which is why Malaysia has gone to Central Asia.
We have gone to Latin America. We have gone to Africa, to work with them in a
small way, to show what is our experience in development, and see whether it is
relevant and can be used by them.
That is our view of nationalism, as far as we are concerned; it is Malaysia,
of course, but we also have an obligation to other countries in the world.
EIR: As this economic crisis has deepened, it has taken a serious
toll on the population of countries and has contributed to increasing frictions
between different religious groups, ethnic groups, political and social
problems--Indonesia is an unfortunate example of this, and it has put
tremendous strains on the Pancasila framework for that country. There have been
others who have spoken of the "clash of civilizations," such as Samuel
Huntington, and that Islamic and Confucian worldviews are incompatible with a
so-called "Western" view. The idea of "divide and conquer" is a product of
colonialism. What do you see as the role that the great religions can play in
contributing to the idea of a just new world economic order?
Dr. Mahathir: I think there is a need for us to understand each
other. In Malaysia, we have an Institute of Islamic Understanding, the purpose
of which is to make Muslims understand their religion and to make non-Muslims
understand what is Islam, because the common label for Muslims is that they are
people who are irrational, given to violence, terrorist activities, and all
that. That has to be corrected, because we are not like that at all. There are
among us some terrorists, I admit that, but there are also terrorists among
Christians, even among the Buddhists or the Japanese have thrown up some of the
most violent groups, religious groups that we have seen lately. So you can't
confine and identify terrorism to any one religion.
Now once we understand that, and we talk to each other, I think this idea
about clashes of civilization will just not happen. But there are some parties,
which are bent upon playing up religious differences by giving distorted
pictures of other religions. Here in Malaysia, we have people of every
different kind of religion. We have Christians, Buddhists, Hindus,
Muslims--everybody is here, but we live at peace with each other. We don't have
any religious riots in this country, or racial riots in this country. I don't
see why the rest of the world should have.
If you want to put a stop, like in Kosova, you have to act properly. But
people are being massacred in front of our eyes, and people with the power to
stop the massacres have literally done nothing.
EIR: General de Gaulle spoke of France as an idea, rather than
simply a geographical area, and he insisted that the nation must be guided by a
conscious sense of an historical mission. What do you see as the idea that is
Malaysia, and what do you see as Malaysia's mission in the region, and mission
in the world?
Dr. Mahathir: Firstly, of course, we have to focus on ourselves and
to develop ourselves, just to prove that it is possible for a developing
country to lift itself up by its own bootstraps, so to speak. But beyond that,
we have always advocated a friendly policy towards our neighbors, to help our
neighbors, and to cooperate with our neighbors, and when we talk about
neighbors, we don't mean just next-door neighbors, but anywhere--people who are
in the same position as we are--that is why we have spent huge sums of money
providing training for thousands of people from Africa, from Latin America,
from the South Pacific, and from Southeast Asia, as well as Central Asia. They
have come here to learn about how to develop a country, because for us, if a
country becomes prosperous, and we know them, then they are going to be good
trading partners for us. As a trading country, Malaysia needs trading partners.
We have to diversify; we can't just trade with Europe, America, or Japan. We
have to trade with everybody; but you cannot trade, if people are poor, so we
have to help them become rich. It's small investments, but I think it is good
for us in the future.
EIR: You challenged the big powers with certain of your
declarations and certain of your actions to defend your own people. Are you
scared that beyond slanders, something after this strong Gore remark here, any
other type of destabilization could be launched against your country and
yourself personally?
Dr. Mahathir: Many types of destabilization and pressures have been
exerted on us. Firstly, of course, the currency traders and their devaluation
of our currency, and then we had the IMF, which is pressuring us to open up our
market, and then, of course, there is this attempt to stir up the people to
rise and overthrow an elected government, a democratic government. So-called
democrats are urging people to overthrow the government without regard for
democracy. Then, we have the attempts to prevent us from recovering, like, for
example, press reports, which deter people from visiting Malaysia. People
cancel visits to Malaysia because the press describes Malaysia as a war-torn
zone, that it is having riots all the time. They even describe Malaysia as
having a haze and it's unhealthy, so don't come to Malaysia. And then, beyond
that, not only the press, the rating agencies, when we have a need to borrow
money, they immediately downgraded us so that it will cost us 15% to borrow
money. They stop us completely from borrowing money.
It looks to us that if you go against the powerful, they will use every
instrument against you; but we feel that if we are going to be independent, and
you believe in democracy and freedom of speech, you must be frank, and we must
tell the world that this is what is wrong. I mean, if people do something that
is unfair to us, we feel a need to express our view. Of course, we run that
risk; today the risk is very great because, for example, we have a steel
industry, which is small. We can't compete against the big people, but if we
open up our market, they will dump the steel here, and our steel industry will
fold up. But it is not only the steel industry; the automobile industry, the
banking industry, everything now is under threat. So we see a very bleak future
ahead of us.
EIR: Because you mention the steel industry, you saw the
declaration of President Clinton in the last days, where he threatened to stop
steel imports from Japan. So it seems that in the United States, also, they are
taking protectionist measures to defend their own industry, while they are
complaining about others.
Dr. Mahathir: This is a double standard. For example, they have
this countervailing duty and they had a very vicious campaign once directed
against our palm oil, saying that our palm oil is bad for the health, even
though scientists in America itself found that it is safe and is good for
health, but that is the kind of campaign, the kind of action taken against
which we find ourselves quite powerless. For a small country like Malaysia,
this is very difficult for us to manage in a world where we really have no
leverage. In the past we had leverage because we can always opt to go to the
other side, in a bi-polar world. In a uni-polar world, you can no longer opt to
go to the other side; there is only one side.
If you don't submit to that side, then, of course, you will be punished. And
we feel that we are being punished now.
EIR: Is there any country that has been more helpful than others to
your country?
Dr. Mahathir: Japan has tried to help. They proposed these loans,
but every time they made the proposal, they were shot down. And when we
proposed the East Asia Economic Caucus, to bring East Asian countries together
as much as Europe has come together, or North America has come together, we
thought that we should speak on common issues together, but we were told that
we cannot have any grouping involving only ourselves. If we have a grouping, it
must include also the United States, as in APEC.
EIR: Malaysia has played a key role in trying to realize the ASEAN
founders' goal of uniting all 10 Southeast Asian countries, along with closer
collaboration with the major Asian powers, Korea, Japan, China, and India. We
were in Cambodia before we came here. What surprised us was the extent of
dollarization of the economy, in a country that is largely dependent on foreign
aid, while enduring economic sanctions. Cambodia has little access to funds,
yet they hardly control their economy, because everyone wants dollars, not the
national currency. To my mind, this is exemplary of why, short of a New Bretton
Woods, some countries don't stand a chance. A New Bretton Woods, combined with
the Eurasian Land-Bridge program, is the future. We are at a unique moment in
history, where we are equally close to a total revolution for the good through
reform of the monetary system and a global development program, as we are close
to a collapse of civilization. In a country like Cambodia, what collapse of
civilization means is palpable. It is a fragile moment in their history.
And yet, as we saw with people in Phnom Penh, there is such optimism. It's
bustling with activity.
What is your sense of the prospects for the future?
Dr. Mahathir: I think we need time in the first place. You cannot
change people overnight. You mention Cambodia, which went through a very
traumatic experience. Suddenly to ask them, now you must become a democracy,
you must have a multi-party state. You know, for a country not used to
democracy and freedom, the tendency is to form any number of parties. They may
have 40, 50 or 120 parties, which means that the people will be so divided up
that there will be no party that will emerge as a national party, able to form
a government, then there will be weak coalitions. Government will be unstable,
and they will keep on changing governments, and there will actually be no
government.
We have to understand the difficulties that they face, so we have to
tolerate a little bit if they are not as democratic as we would like them to
be. After all, it took the U.S. a long time to develop democracy. It took
Europe a long time to develop democracy. Switzerland gave the vote to women
only a few years back. So, why are we insisting that you must be 100%
democratic, otherwise, you are out? It is not possible--sentiments, culture.
These things play a role, so our view about Cambodia is that we should bring
them in. Let us work together. Let us expose them to what can be done. We have
brought a lot of Cambodians here just to explain to them, this is how a free
market works.
A free market is not easy. You ask the Russians to have a free market and
democracy all at the same time. They do not understand democracy, never had
democracy, not even during the Tsars' time. How do they suddenly become
democratic? It's not just so simple. Then you ask them to have a free
market.
For 70 years, they had only these state enterprises. They had no
entrepreneurs, no managers, and no private capital. How do you have a free
market? You must give time for them: In fact, I spoke about this to Kissinger,
I spoke about this to John Major, to Margaret Thatcher, and a few others, that
you have to teach Russia how to manage a free market. When you ask them to
become both democratic and operate a free market, they will fail. This I told
them 10 years ago, and they failed.
China, I think, did better, because it retained the political system, a very
rigid political system, but allowed for a free market, operating under very
strict conditions. China is also fortunate in that it has a lot of expatriates
who went home. All the Russians who went to the United States or Britain, they
became absorbed there, they haven't gone back to Russia. Russia has got no
entrepreneurs, no managers, no private capital, and it's going to go into a
series of experiences like we are seeing now.
It has become obvious to everyone that you cannot allow the market to
determine how the international economy is run. If you don't regulate, it would
seem that the international economy will collapse, as you can see it has
already spread from East Asia to Russia to Latin America, and even to Europe
and America.We believe in certain common values, but we also believe that each
nation should have a right to decide for itself, to retain its own
independence. . . . But at the same time, countries should not do
anything to harm other countries, which is why we always talk about "prospering
our neighbor."It looks to us that if you go against the powerful, they will use
every instrument against you, but we feel that if we are going to be
independent, and you believe in democracy and freedom of speech, you must be
frank, and we must tell the world that this is what is wrong.
|
|
