Japan's malaise due to copying West: Mahathir

Japan's malaise due to copying West: Mahathir

OSAKA (Reuters): Malaysian Prime Minister Mahathir Mohamad said on Thursday a Japanese economic recovery was the key to East Asian prosperity, but that Japan's economic malaise was largely due to an insistence on aping Western practices.

Speaking at a symposium in the western Japanese city of Osaka, Mahathir said: "The present economic problem that you seem unable to overcome is due almost entirely to your attempt to adopt in toto Western practices and Western norms.

"I suspect that just as the Japanese East Asian Empire ended in disaster, the Japanese copy of Western ideologies and systems will have the same end result."

Mahathir lamented that Japan had replaced its own traditional political, economic and social practices with Western methods and standards.

"Japan has discarded lifetime employment, cooperation between the government and the private sector, regional cooperation, ideology, etc. Even Japanese youths want to be blondes, work less and play more," he said.

Mahathir has often criticized the West and blamed overseas speculators for much of the Asian financial crisis that mauled the region in 1997.

In 1998 Malaysia turned its back on world markets by instituting strict capital controls and a fixed exchange rate in a bid to shield the economy and its currency, the ringgit, from currency speculators. But the country has recently made moves to encourage foreign investment by permitting foreign equity in firms such as its flagship airline carrier Malaysian Airline System Bhd

Despite this, Mahathir had sharp words for speculators on Thursday, describing them as "predatory commercial giants".

"The idea that the market knows best is promoted by those who dominate the market and want their financial strength to determine what is best for themselves," he said.

Mahathir called on Japan to take a more active role in the Asian economy by getting its own economic house in order and increasing investment to stimulate other Asian economies.

Closer cooperation between Japan and other Asian nations, including Malaysia, would enable the region to come up with measures that would benefit not only Asia but also the rest of the world, he said.

"For East Asia to recover faster, Japan must play a big role. Japan has the financial strength and the technology to contribute towards East Asia's recovery and growth," he added.

"East Asia can consume what Japan produces, more if Japan helps East Asia to prosper again. First help us to recover by investing in our countries and setting up the Asian Monetary Fund."

Some in Asia have called for the establishment of an Asian version of the International Monetary Fund, which has been slammed for its handling of the regional financial crisis.

"Many of us think that if Japan and the East Asian countries work together we can even come up with a model of cooperation for mutual good for the rest of the world," he said. "That will include the development of a financial architecture and the regime for international trade."

Mahathir also issued a ringing call for broader economic cooperation according to an Asian model.

"By coming together and standing up against unfettered predatory capitalism and the absolutely free market that it wants to impose on the world, by offering alternative systems and a code of ethics, Asia and in particular East Asia, with Japan playing a leading role, can prevent the headlong rush towards destruction which the current Western model will certainly lead us to."