Mahathir warns of 'anarchic' market

Mahathir warns of 'anarchic' market

Agence France-Presse, Kuala Lumpur

Malaysian Prime Minister Mahathir Mohamad warned Monday that
free capital flow would lead to an "anarchic" globalized market
and called for all countries to be allowed to impose their own
forms of control.

"There is no reason to believe that the market will not become
anarchic, and the strong will not oppress the weak, if the market
is left unregulated.

"Level playing fields notwithstanding, everyone knows that the
big and the rich will dominate a globalized free market," the
premier said.

Mahathir, who is also Malaysia's finance minister, said many
developing countries were not given an equal opportunity to voice
their opinions on regulating capital flow as a means of
protecting their markets.

"In the World Trade Organization conference, for example,
people are brow-beaten by countries which have very strong
delegations and very powerful influence over other countries.

"So it is not fair negotiations. Negotiations should be fair,
and everybody should be given a hearing," he told reporters on
the sidelines of a regional conference of the Union Network
International-Asia and Pacific Regional Organization.

Mahathir said in his speech that Malaysia embraced the arrival
of globalization, but rejected its present interpretation as
being exclusively confined to unregulated cross-border capital
flow.

"While free flow can mean the inflow of capital to the
capital-poor countries, it can also mean -- and this we have
learnt through painful experience -- an outflow of the invested
capital," he said.

"We need to regulate because when you pull out, countries
which were growing are now unable to recover."

The 76-year-old premier said Malaysia "suffered greatly"
during the 1997-1998 Asian financial crisis when foreign
investors pulled capital out of the country.

He said although Malaysia's government managed to stabilize
the economy by adopting selective capital controls in 1998 and
pegging its ringgit currency at 3.80 to the dollar, different
countries needed different strategies to resolve their own
financial problems.

"It's not so easy to say that merely by pegging the currency
it will solve the problem.

"There are lots of other things that need be done so countries
should be given the chance to give their opinions."

Mahathir, who on Sunday projected Malaysia's economic growth
could exceed four percent this year, told reporters his optimism
was fueled by positive signs of a recovering economy.

"Many experts have said it should be 6.0 percent growth... we
see a lot of business activities in Malaysia, we see a lot of
tourists coming into Malaysia," he said, adding some 1.2 million
tourists visited in March.

"So, it looks like there is a curve going up," he said.

Mahathir had previously said the economy was expected to grow
by three percent this year while the central bank said it would
be 3.5 percent.