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		Fine-tune the Malaysian capital control and schedule the efforts to rectify the weaknesses. Summary of the speech by Dr Tan Seng Giaw, DAP National Vice-Chairman and MP for Kepong at the Kulai, Johor, DAP dinner on 13.12.1998.
		The participation of the Kelantan Menteri Besar Y.A.B. Tok Guru Nik Abdul Aziz and the Deputy President of PRM Encik Abdul Razak is meaningful. Our working together on universal issues of justice, truth and peace; clean, efficient and trustworthy governance can only be good to the nation. Since the beginning of September 1998, the Government has announced the foreign exchange control, fixing the currency at U.S.$1 to RM3.80. Yesterday, the Prime Minister said that the rate would not be changed. He told foreign fund managers that the Government would consider fine-tuning the control measures. Actually, the economic fundamentals of this country are not as bad as those in countries such as Indonesia. But, Malaysia has definite weaknesses. For example, before the economic crisis 17 months ago, banks and other financial institutions gave loans to too many developers to build too many high-cost houses, office blocks, hotels and golf courses. Now, the glut may be more than RM100 billion. Foreign speculators have massive funds in trillions of US dollars. They can devalue the currency of any country or region and damage the stock markets easily. They are only waiting for the opportunity to reap the profits. If a country or a region has weaknesses, they will pounce. South Korea, Thailand and Indonesia have been in a bad shape. They have turned to the International Monetary Fund, IMF, for help. On the other hand, Malaysia has chosen a different				path including capital control to protect herself from the currency marauders. Since 1978, China has opened its door to foreign investors and traders. It continues with the foreign exchange control. Its currency, Renminbi, connot be used outside the country. Speculators cannot get a grip on the currency. However, the background of China is not the same as that of Malaysia. For instance, she has 1.2 billion people compared to 22 million Malaysians. About 90%of China's trade are within the country whereas nearly 80% of our trade are with foreign countries. South Korea, Thailand aand Indonesia are working hard to restore their economy. While hoping that they will recover, Malaysians of all races and political parties must work together to get our economy back to normal. We wish that the Govenment would tell us the ways with which it intends to streamline the foreign exchange control measures. How long will the control be? The system of foreign currency trade in the world is complicated. Each day, the total volume of currency trade in the world is about US$2,000 billion, out of which only perhaps 5% involve genuine exchange of goods and services. The rest are only speculations. As the Government enforces capital control, it should review its efforts to identify and eradicate the shortcomings. If the foundations of the economy and governance are good, the country will not be attacked so easily. Our economy will not fall so fast. Dr Tan Seng Giaw



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