Mahathir's call to WTO makes sense

Mahathir's call to WTO makes sense

Since the Asian currency and stock market turmoil began, resentment against the West has swept through Southeast Asia. It is not just Malaysian Prime Minister Mahathir Mohamad who believes there is a Western plot to undermine the economies of this whole region.

Now that Hong Kong has been badly hit, with Western speculators gunning for the dollar and dumping shares, the conspiracy theory is quickly making the rounds. Even Hang Seng Bank chairman Sir Q.W. Lee has spoken of a possibly concerted attack on Hong Kong's economy.

People in Hong Kong are beginning to point to what they see as strange coincidences in the recent past throughout the region, starting with the attack on the Thai baht, followed by a seemingly systematic assault on country-by-country basis, ending in a massive attack on the Hong Kong dollar and its peg to the United States dollar.

Then came the Morgan Stanley's announcement about reducing its Hong Kong holdings to zero, followed by Moody's Investors Services' unusual announcement of plans to downgrade Hong Kong banks.

All these actions may have been motivated by nothing more than a desire to make a quick profit. After all, Western markets were also affected.

Nonetheless, recent events show that emotions can be deeply stirred even by happenings on the market that cannot be in anybody's interests, either in the East or in the West. Something needs to be done.

Dr. Mahathir, widely mocked in Hong Kong when he first pinned the blame on American financier George Soros, may be pointing in the right direction with his suggestion that the World Trade Organization (WTO) study new rules, including the introduction of regulated currency trading, to prevent a recurrence.

Hong Kong authorities, which have announced they are looking into the local structure and some of its obvious flaws, have a vested interest in supporting the Malaysian leader.

Just as Hong Kong's own structure requires proper safeguards, so do those of the region. In fact, all the world's markets need better protection and no organization is better equipped to work this out than the WTO.

-- Hong Kong Standard