Malaysia Prime Minister says forex controls to stay
Malaysia Prime Minister says forex controls to stay
PARIS (Reuters): Malaysian Prime Minister Mahathir Mohammed
reiterated on Saturday that he had no intention of lifting a
package of controls on cross-border capital flows of in the near
future.
He also indicated that, while Southeast Asian countries are
moving towards a regional common market, a single currency was
something which would need a great deal of thought and planning.
"The Malaysian economy is recovering but it is recovering
because we have certain controls in place. We are not certain
that if we lifted those controls attacks on the currency would
not be mounted again," Mahathir told reporters following talks
with French President Jacques Chirac.
"Today people don't look at currency as a means of exchange,
they see it as a commodity you can buy or sell to make money and
it doesn't matter if you destroy it in the process," he said.
Asked whether the euro could be an inspiration or a deterrent
to creating a single currency for the Association of South East
Asian Nations (ASEAN), Mahathir said the European currency's
slide to 16 percent below its launch value showed it was vital to
get the mechanism of a single currency right.
"We are studying the euro. At first it looked very good but it
has shifted much more than expected," he said. "We don't really
know what should be the mechanism of a single currency."
Mahathir again strove to quash rumors that ill health had
sparked his pulling out of the World Economic Forum annual Davos
meeting in Switzerland, saying he changed his mind about taking
part after his speech was replaced by a panel discussion.
"I think Davos would have been a good forum for me to address
with my views," Mahathir, whose stand against the effect of
globalization on developing economies led to his fixing of a
currency peg for the Malaysian ringgit in September 1998.
"Originally it would have been a keynote speech which would
have given me 30 minutes, but there was a change of plan and I
was to be a member of a panel of six or seven people," he said.
"I'm very healthy, as you can see," the 74-year-old prime
minister beamed, adding that he was currently going jogging twice
a day, in the morning and in the evening.
Mahathir, who has said the ringgit peg will remain until there
is global accord on an international financial framework to
prevent speculative attacks on currencies, repeated his fears
about the threat he says globalization poses to poor economies.
But he said imposing strict controls on capital flows, which
had worked for Malaysia because of its low foreign debt, would
not necessarily work for its neighbors in south east Asia.
Mahathir said his talks with Chirac had covered bilateral
cooperation and the transfer of technological knowhow as well as
world trade and globalization.
The two leaders also discussed the possibility of Malaysian
national carrier Malaysian Airline System (MAS) buying aircraft
from European consortium Airbus Industrie.
MAS has said it plans to add four freighters to its fleet in
the next two years, at least two from Boeing Co..
Chirac and Mahathir did not, however, discuss a project
between Citroen and Malaysian automaker Proton to jointly produce
a second car. The project was expected to have featured on the
agenda following reports it is in difficulty.
"We did not speak about Citroen. I intend to speak to Citroen
myself," Mahathir said.
PARIS (Reuters): Malaysian Prime Minister Mahathir Mohammed
reiterated on Saturday that he had no intention of lifting a
package of controls on cross-border capital flows of in the near
future.
He also indicated that, while Southeast Asian countries are
moving towards a regional common market, a single currency was
something which would need a great deal of thought and planning.
"The Malaysian economy is recovering but it is recovering
because we have certain controls in place. We are not certain
that if we lifted those controls attacks on the currency would
not be mounted again," Mahathir told reporters following talks
with French President Jacques Chirac.
"Today people don't look at currency as a means of exchange,
they see it as a commodity you can buy or sell to make money and
it doesn't matter if you destroy it in the process," he said.
Asked whether the euro could be an inspiration or a deterrent
to creating a single currency for the Association of South East
Asian Nations (ASEAN), Mahathir said the European currency's
slide to 16 percent below its launch value showed it was vital to
get the mechanism of a single currency right.
"We are studying the euro. At first it looked very good but it
has shifted much more than expected," he said. "We don't really
know what should be the mechanism of a single currency."
Mahathir again strove to quash rumors that ill health had
sparked his pulling out of the World Economic Forum annual Davos
meeting in Switzerland, saying he changed his mind about taking
part after his speech was replaced by a panel discussion.
"I think Davos would have been a good forum for me to address
with my views," Mahathir, whose stand against the effect of
globalization on developing economies led to his fixing of a
currency peg for the Malaysian ringgit in September 1998.
"Originally it would have been a keynote speech which would
have given me 30 minutes, but there was a change of plan and I
was to be a member of a panel of six or seven people," he said.
"I'm very healthy, as you can see," the 74-year-old prime
minister beamed, adding that he was currently going jogging twice
a day, in the morning and in the evening.
Mahathir, who has said the ringgit peg will remain until there
is global accord on an international financial framework to
prevent speculative attacks on currencies, repeated his fears
about the threat he says globalization poses to poor economies.
But he said imposing strict controls on capital flows, which
had worked for Malaysia because of its low foreign debt, would
not necessarily work for its neighbors in south east Asia.
Mahathir said his talks with Chirac had covered bilateral
cooperation and the transfer of technological knowhow as well as
world trade and globalization.
The two leaders also discussed the possibility of Malaysian
national carrier Malaysian Airline System (MAS) buying aircraft
from European consortium Airbus Industrie.
MAS has said it plans to add four freighters to its fleet in
the next two years, at least two from Boeing Co..
Chirac and Mahathir did not, however, discuss a project
between Citroen and Malaysian automaker Proton to jointly produce
a second car. The project was expected to have featured on the
agenda following reports it is in difficulty.
"We did not speak about Citroen. I intend to speak to Citroen
myself," Mahathir said.