Mahathir coutions on freeing markets

Mahathir coutions on freeing markets

KUALA LUMPUR (AFP): Malaysian Prime Minister Mahathir Mohamad reminded the Group of Fifteen (G-15) developing countries Saturday to be cautious in implementing market liberalization and globalization plans.

Citing how a "liberal policy towards currency and share trading has resulted in abuses which undermine years of painstaking efforts to develop the countries of Southeast Asia," Mahathir urged G-15 members to be more "circumspect."

"The success of the members of the G15 depends on their ability to understand the changes in the global market place and to influence these changes in their favor," he said when opening a G-15 trade fair.

"They cannot be passive and accept anything and everything that is thrust upon them," said the outspoken premier, known for his anti-West stance.

While there were genuine investors, "we must not forget that there are many who only see opportunities for enriching themselves at our expense," he added, referring to Southeast Asia's financial crisis.

The Malaysian leader has repeatedly accused foreign funds of destabilizing Southeast Asian financial markets which have plunged since July, and spearheaded calls to regulate currency trading.

While "the world is galloping towards globalization and liberalization," Mahathir noted that the actual definition of the two terms was still unclear.

But "developed countries have taken it upon themselves to interpret these terms as meaning the removal of barriers to their trade and their investments including portfolio investment," he said.

The Malaysian leader warned his developing counterparts "to watch this very carefully as their own industries are not yet able to compete and take advantage of investments in other countries."

Opening up of markets at such a time may result in "unrestricted entry of competing products from industrialized countries which can afford to lose because they can make profits elsewhere, whereas developing countries may not have products to export to markets opened to them," he said.

"The result may be detrimental to their economic and industrial development," he added.

Mahathir will host a three-day G-15 heads of state summit starting Monday, where the capital market volatility is expected to dominate discussion.

Others in the group, established in 1989 to counterbalance the Group of Seven (G-7) industrialized nations, are Algeria, Argentina, Brazil, Chile, Egypt, Indonesia, India, Jamaica, Mexico, Nigeria, Peru, Senegal, Venezuela, Zimbabwe and Kenya, the 16th and newest member.