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Statement by Dr Tan Seng Giaw, DAP National Vice-Chairman and MP for Kepong on the International Monetary Fund, IMF's saying that Malaysia may have been right on capital controls during the economic crisis. 10 September 1999.

The economic crisis has lasted for 23 months. We hope that there are genuine signs of recovery. As the people look forward to better times, the controversy over the imposition of capital controls continues.

While countries such as Indonesia, Thailand and Korea have accepted IMF funds, Malaysia chooses to go it alone. We have always advocated that going to the IMF is not a good solution. On 1 September 1998, Malaysia imposed capital controls, prohibiting foreign portfolio investors from taking their profits home for twelve months.

The IMF board annual review of Malaysia's economy on 7 July 1999 "broadly agreed that the regime of capital controls had produced more positive results than many observers had initially expected."

How far do Malaysian capital controls work compared to the IMF-aided countries remain to be seen. Meanwhile, we are not happy with the Government's lack of efforts to correct the weaknesses in the internal financial architecture. Granted, these may not be as bad as certain countries such as Indonesia. Nevertheless, we have to deal with them to ensure that economic crisis will not affect the country as badly as now. Although Malaysia may not be able to avoid the fluctuations of international economy, she can certainly have solid fundamentals such as huge foreign exchange reserves to cushion the vagaries of international finance.

Certainly, foreign speculators have been partly responsible for the crisis. But, during this breathing space of foreign exchange controls, the Barisan Nasional has not done enough to rectify the inherent weaknesses such as corruption, cronyism, nepotism, wastage and mismanagement.

On the other hand, the Government indulges in pre-election promises, largess and good tidings. The mass media continue to carry Barisan nasional news and scarcely any good news from Oppositon Parties.

We hope that the Government creates an atmosphere conducive to a fair reportage of oppositon news. At the same time, we also wish that there are greater and effective efforts to tackle the inherent weaknesses for long-term security.

Dr Tan Seng Giaw