Dr M: Learn from past, present financial crises
Europeans, Americans and Asians must come together to study and learn from the past and present financial crises to seek solutions acceptable to all, says former Malaysian Prime Minister
Asia has a big start in pulling out of the present financial crisis, with the relationship in terms of trade and economy now focused on the region and its growth, as well as its influence in the world economy, former prime minister Tun Dr Mahathir Mohamad said.
"The progress had taken place almost immediately after the last war but lately, with the financial crisis problems starting in Europe, the difference in terms of economic growth between the two regions is much bigger.
"Apparently, Asia has escaped the full impact of the financial crisis," he said during a teleconference from Bosnia Herzegovina, held in conjunction with the PLUS International Expressway Conference and Exhibition 2010 in Kuala Lumpur yesterday.
Dr Frank-Jurgen Richter, the president of Switzerland-based Horasis, who moderated at the teleconference, had asked the former premier his opinion on suggestions of a power shift from the West to the East.
Dr Mahathir said Europeans, Americans and Asians must come together to study and learn from the past and present financial crises to seek solutions acceptable to all.
"It will be a better road if we learn from our past experiences. If we studied the causes of the 1997/98 Asian financial crisis and the present economic crisis, we would be able to identify what went wrong. If we understand what was wrong, we should not repeat the mistakes.
"It is not possible to have a perfect solution. There will be solutions and we will still have problems but there will be less problems if we take lessons from our past and present experiences," he said.
On increased unemployment in Europe and the US due to the present financial crisis, Dr Mahathir said they should return to producing goods rather than merely being involved in the speculative markets.
"Leaders as well as those from Asian countries must look at the reality of things.
"Today, things have changed and at a rapid pace to the point where new and innovative goods come from the East. You have to go back to the real business, the production of goods needed by people, and not gambling in the financial market, waiting for the value of certain currency to go up and so on," he said.
"Malaysia shifted from agriculture and mining-based economy to manufacturing because industries provide many jobs to the people. We do this by inviting foreign investors to set up industries that provide jobs.
"But now, we have reached a stage that we need to import foreign labour. As such, we have decided to move from labour-intensive to high technology economy to ensure that our people earn higher incomes," he added.
He concurred with Richter that Europe and the US are now resorting to protectionism to provide jobs for their people but defended some countries, including Asia that will resort to the same policy to safeguard national interest which is crucial to the economy and growth of the respective countries.
"Some countries will try to protect not by having tariffs but by having certain policies such as specifications and so on, which in effect become protectionist," he cited.
On his advice for the US President Barrack Obama, Dr Mahathir said he would ask the president not to overpromise.
Dr Mahathir also said China should not be considered as a threat. Rather, we should work towards mutual engagement.
"You have to accept that China is going to be strong economically. And as a strong economy, obviously they must have a strong military to protect themselves. So China is not a threat to the world," he said.
He said China and Malaysia have been in contact for thousands of years and not even once has the former conquered the country.
"But when the Portuguese came, they conquered us. With that kind of experience, it is far better to deal with China than to deal with countries which resort to military means quickly. So, we should tell China 'Let's work together for the betterment of the world'," he said.
Asia has a big start in pulling out of the present financial crisis, with the relationship in terms of trade and economy now focused on the region and its growth, as well as its influence in the world economy, former prime minister Tun Dr Mahathir Mohamad said.
"The progress had taken place almost immediately after the last war but lately, with the financial crisis problems starting in Europe, the difference in terms of economic growth between the two regions is much bigger."Apparently, Asia has escaped the full impact of the financial crisis," he said during a teleconference from Bosnia Herzegovina, held in conjunction with the PLUS International Expressway Conference and Exhibition 2010 in Kuala Lumpur yesterday.
Dr Frank-Jurgen Richter, the president of Switzerland-based Horasis, who moderated at the teleconference, had asked the former premier his opinion on suggestions of a power shift from the West to the East.
Dr Mahathir said Europeans, Americans and Asians must come together to study and learn from the past and present financial crises to seek solutions acceptable to all.
"It will be a better road if we learn from our past experiences. If we studied the causes of the 1997/98 Asian financial crisis and the present economic crisis, we would be able to identify what went wrong. If we understand what was wrong, we should not repeat the mistakes.
"It is not possible to have a perfect solution. There will be solutions and we will still have problems but there will be less problems if we take lessons from our past and present experiences," he said.
On increased unemployment in Europe and the US due to the present financial crisis, Dr Mahathir said they should return to producing goods rather than merely being involved in the speculative markets.
"Leaders as well as those from Asian countries must look at the reality of things.
"Today, things have changed and at a rapid pace to the point where new and innovative goods come from the East. You have to go back to the real business, the production of goods needed by people, and not gambling in the financial market, waiting for the value of certain currency to go up and so on," he said.
"Malaysia shifted from agriculture and mining-based economy to manufacturing because industries provide many jobs to the people. We do this by inviting foreign investors to set up industries that provide jobs.
"But now, we have reached a stage that we need to import foreign labour. As such, we have decided to move from labour-intensive to high technology economy to ensure that our people earn higher incomes," he added.
He concurred with Richter that Europe and the US are now resorting to protectionism to provide jobs for their people but defended some countries, including Asia that will resort to the same policy to safeguard national interest which is crucial to the economy and growth of the respective countries.
"Some countries will try to protect not by having tariffs but by having certain policies such as specifications and so on, which in effect become protectionist," he cited.
On his advice for the US President Barrack Obama, Dr Mahathir said he would ask the president not to overpromise.
Dr Mahathir also said China should not be considered as a threat. Rather, we should work towards mutual engagement.
"You have to accept that China is going to be strong economically. And as a strong economy, obviously they must have a strong military to protect themselves. So China is not a threat to the world," he said.
He said China and Malaysia have been in contact for thousands of years and not even once has the former conquered the country.
"But when the Portuguese came, they conquered us. With that kind of experience, it is far better to deal with China than to deal with countries which resort to military means quickly. So, we should tell China 'Let's work together for the betterment of the world'," he said.
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