Mahathir declares verbal war on speculators

Mahathir declares verbal war on speculators

By Madhav Reddy

KUALA LUMPUR (Reuter): If words could kill, Malaysian Prime
Minister Mahathir Mohamad would have wiped out the speculators
causing havoc in Southeast Asian currencies.

In the last four days, the tough-talking Mahathir has called
currency speculators "rogues", "robbers", "anarchists" and
"brigands" with a "political agenda" to "destroy all the progress
that we have made".

"We see a well-planned effort to undermine the economies of
all the ASEAN countries by destabilizing their currencies.

"Our economic fundamentals are good, yet anyone with a few
billion dollars can destroy all the progress that we have made,"
Mahathir said at the opening of the ASEAN foreign ministers
meeting on Thursday.

Mahathir, known for his sharp-tongued criticisms of the West,
said the countries of the region were told they must open up
their markets and that trade and commerce must be free.

"Free for whom? For rogue speculators. For anarchists wanting
to destroy weak countries in their crusade for open societies, to
force us to submit to the dictatorship of international
manipulators," he said.

"We want to embrace borderlessness, but we still need to
protect ourselves from self-serving rogues and international
brigandage.

"We feel that there is some other agenda, apart from making
money. As you may have noticed, ASEAN countries are the
targets...Thailand, Indonesia, the Philippines (Singapore) and
Malaysia," he was quoted as saying by local newspapers on Monday.

ASEAN, or the Association of South East Asian Nations, also
groups Brunei and Vietnam, and since Wednesday, Laos and Myanmar.
Mahathir was quoted as telling Malaysian reporters following him
on a six-day visit to Japan on Monday that a "certain powerful
American financier" was behind the speculative attacks.
He said that the American financier, whom he has not named, was
on a "crusade for charity".

"It means he robbed from the poor to show he's charitable,"
added the prime minister, who returned to Malaysia on Tuesday.
Dealers in Singapore and London have named George Soros and his
Quantum group as one of those leading the attack on Southeast
Asian currencies. Soros also sponsors The Open Society, an
international humanitarian foundation.

Apparently not satisfied with calling them names, Mahathir on
Thursday threatened speculators with possible laws in all of
Southeast Asia to curb speculation.

His verbal attacks have not cut much ice with speculators, who
continue to sell down the five major currencies in Southeast
Asia, but they have set the tone for possible future retaliation
by governments in the region, analysts said.

"The PM has not said anything that shows there would be
concrete steps taken against speculators," said a dealer with a
European bank in Singapore. "But this could mean greater
cooperation between ASEAN countries in future."

Dealers and analysts said a law against speculation may not
bear fruit unless the countries resorted to draconian capital
controls. But it could take the form of a stronger agreement by
central banks to help each other.

In the past few years, central banks of the region and the
Bank of Japan have struck repurchase pacts under which they help
each other defend their currencies if asked.

Malaysia and neighboring countries have seen attacks on their
currencies in the past month, forcing devaluations in Thailand
and the Philippines and expensive intervention efforts in
Malaysia. Indonesia has widened the trading band for rupiah.

On Thursday, all the currencies fell to new lows, breaking
psychological barriers, on sustained dollar buying.

The Singapore dollar fell to a 32-month low of 1.4785 per U.S.
dollar, the ringgit broke through the 2.65 barrier, the baht
slipped sharply to a low of 32.60, the rupiah was below 2,600 and
the Philippine peso eased to 28.47 from 28 previously.