Mohamed Yakcob: US copied Malaysia-style remedies

Source TheStar

KUALA LUMPUR: The US Government, which criticised Malaysia for its handling of the 1997 financial crisis, is adopting the same measures to combat its current financial problems, Second Finance Minister Tan Sri Nor Mohamed Yakcop said.

Nor Mohamed said in 1997, the World Bank, International Monetary Fund and the United States criticised Malaysia for not practising liberal capitalism.

“Now the United States is assisting its banks and adopting similar measures like we did,” he told Lim Guan Eng (DAP - Bagan) in Parliament on Monday.

Nor Mohamed also said the frequency of financial global crises was caused by weaknesses in the system of liberal capitalism, led by the United States.

Such a system has minimal supervision and the government role in the economic sector was reduced, where privatisation was implemented on a large-scale, including selling national assets to outsiders, he said.

“We need to find a new alternative to create a fair and balanced financial infrastructure,” he said.

Nor Mohamed said in the global financial system, 80% of the global reserves were used by the United States.

He said the United States borrowed US$3bil every working day as the Americans have negative savings.

“To avoid a global financial crisis in future, priority must be given to a new method where large reserves in Asian countries and oil producing countries would be used in this region,” he said.

In his reply to Dr Mohd Fuad Zarkashi (BN - Batu Pahat), he said a politically unstable country will have problems in attracting investments.

“We have overcome the financial crisis in 1997 where we did not reach the phase of experiencing drastic change in the political, social and also economic structure like our neighbouring country.

“We need to be ready and equip ourselves to face (another) global financial crisis.

“The crisis may come in various forms and we need to have a flexible economic system for that,” he said.