Western economic theories are 'as imperfect as Asian'

Western economic theories are 'as imperfect as Asian'

KUALA LUMPUR (Reuters): Malaysian Deputy Prime Minister Anwar Ibrahim was quoted yesterday as criticizing Western theories that Asia's financial crisis was the result of corruption and cronyism, saying the West was just as imperfect.

"This outlook suggests that all negative elements are linked to the East and the West is free from such weaknesses like safeguarding businesses and cronyism, free from corruption and social ills," Anwar was quoted as saying by Malaysia's national news agency Bernama.

The news agency did not spell out the circumstances of Anwar's comment. But it also quoted U.S. ambassador to Malaysia John Mallot as saying in an interview last week that Asia's economic crisis had sent a clear message that political favoritism alone could ensure success in business.

For many businessmen in Asia "political connections have mattered far more than good management or business confidence", Malott said.

"I hate to sound like teaching economics, but I think (the) market is a more efficient allocator of credit than politicians, governments or bureaucrats," the ambassador added, according to Bernama.

Anwar said all critical statements now seemed to be aimed at developing nations. He said the world community, including the International Monetary Fund and World Bank, never took the West to task for its own faults.

"They need not hide the fact that inequality and injustices also occur in the West and that they spring from an unfair international system of trade," Anwar said.

"No nation should be deemed most efficient. All countries should change, progress and mature," he added.

Anwar admitted that some Asian countries needed reform to stamp out corruption and project transparency and order.

Although Malaysia had not sought an economic bail out by the IMF, it had taken "all the necessary measures, including regional-level measures, to reform the (economic) system."

Since the start of the Asian financial crisis in July, Malaysia has repeatedly said its economic fundamentals are strong and the country does not need IMF help to survive.

The Malaysian ringgit has so far lost about 45 percent of its value against the U.S. dollar while stock prices have tumbled by about 50 percent.

Anwar said that, despite its own problems, Malaysia had offered Indonesia 1.0 billion ringgit ($250 million) to help with Jakarta's economic reforms.

"We should help each other, not out of fear, if we are to have an environment that is conducive to change," he said.

Anwar said Prime Minister Mahathir Mohamad, who visited Jakarta recently, would also be making trips to Singapore, the Philippines and Thailand to formulate "a combined economic strategy for the region".

Anwar said that, as deputy premier, he would be making informal visits to Japan and Taiwan for the same reasons.