[ Index ]
 

There is a valid reason for Malaysia to avoid going to the International Monetary Fund, IMF, for help to overcome the economic crisis. IMF has its weaknesses and it cannot protect the world's finance effectively. Sometimes, it fails to understand the true situation of a country affected by economic

crisis.

Clearly, the world financial architecture has left much to be desired. Unscrupulous currency speculators often seize the opportunity to abuse its weaknesses to attack the currency of a nation or a region, wreaking havoc on its economy. We hope that the Prime Minister will go through various channels to press the rich countries to take concerted action to rectify the weakneses in the world financial architecture. These countries dominate the world economy.

Capital control has its pros and cons. In a crisis, traders find it easier to trade with fixed exchange rates. How long will this type of control last? Meanwhile, there are people who continue to have no confidence in the capital control.

If we can stop currency speculators from destroying our currency, then there is no need for capital control. Now, the world financial architecture remains the same and its mechanism can still be abused. Does this mean that Malaysia will continue to control its capital for ever?

Dr Mahathir appears to mean that as long as speculators can do what they want, fixed exchange rates remain. We hope that he will deal with this rationally, coming out with a strategy on how to end capital control. Something has to be done.

Dr TaNn Seng Giaw