But Mahathir Assails Foreign Speculators : Malaysia Marks 40 Years As Independent Nation
International Herald Tribune
September 1, 1997
Thomas Fuller

Malaysians celebrated 40 years of independence on Sunday in a nation arguably more secure and prosperous than at any time in its modern history.

But since the end of March, the country's stock market has dropped about 35 percent, and since early July its currency, the ringgit, has plunged about 18 percent against the dollar, casting a cloud over an economic growth of 8 percent or better in the last nine years.

In a speech marking the independence anniversary, Prime Minister Mahathir bin Mohamad suggested that speculators were ready to destroy the foundations of the economy.

"Today we have seen how easily foreigners deliberately bring down our economy by undermining our currency and stock exchange," said Mr. Mahathir, 71, who has led the nation since 1981. "What we have worked for in the past 40 years can be destroyed by them in a matter of weeks."

He predicted that there was a possibility the economy would not attain the 8 percent growth this year that had been forecast, and that the trade deficit might also worsen.

Referring to "ferocious animals" lurking in a borderless world, he added that "if we do not strive to protect our independence, directly or indirectly, colonialists will return to colonize us."

This in a country whose neighbors, with the exception of Cambodia, are at peace, and whose gross domestic product, after close to a decade of economic growth, stands per capita 50 percent higher than Thailand's.

Recently the prime minister has targeted George Soros, the founder of the $10 billion Quantum Fund, almost daily as the person who started the wave of speculative attacks. Mr. Mahathir has said he had proof of the American financier's involvement. Other, unidentified foreigners are blamed for selling Malaysian stocks and currency short.

"He needs to focus on Soros because he wants to send a clear signal that all he is opposed to is financial speculators — and that he is very welcoming of foreign direct investment," said K. S. Jomo, a professor at the University of Malaya.

Attacks on the West are nothing new for Mr. Mahathir. The sharp-tongued prime minister has been consistent in condemning everything from Western hairstyles to declining discipline.

What is new is Malaysia's — and Mr. Mahathir's — drive to lure foreign companies and "intelligence" workers to the country, and the notion that this goal is perhaps imcompatible with his fiery rhetoric.

Earlier this year the prime minister visited the United States, Japan and Europe to promote the Multimedia Supercorridor, an industrial park near Kuala Lumpur now under construction. Companies like Microsoft and Sun Microsystems are committed to a role in the project, which promises to provide infrastructure for research and development centers, a multimedia university, and headquarters for multinational corporations.

"Malaysia upholds the virtues of the new world order, believing that the globe is collectively moving toward a 'century of the world,"' says a page on the World Wide Web dedicated to the project. During his travels, Mr. Mahathir has indeed echoed such views, which seem to contrast sharply with his speech over the weekend.

"In some ways the speech is not for foreign consumption," Mr. Jomo said. "It's basically for a domestic audience."

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