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Malaysia's prime minister slams the IMF

"Globalization has already shown signs of becoming a religion that tolerates no heresy" Malaysia's Prime Minister Mahathir Mohamad PHOTO: AP

Prime Minister Mahathir Mohamad took a swipe at unbridled globalization yesterday and said that nations should break free from economic straitjackets to deal with problems in their own way.

Mahathir called Malaysia's rebound from the 1997-1998 Asian economic crisis -- accomplished, he feels, by rejecting programs advocated by the IMF -- an example of doing "the right thing."

Mahathir was giving a keynote speech and responding to questions from ministers, officials and corporate leaders from the Pacific Basin Economic Council, a pro-business grouping holding its general meeting here.

The Malaysian leader has long spoken against what he sees as powerful nations -- particularly the US -- establishing economic control over poor countries through institutions such as the IMF.

"Globalization has already shown signs of becoming a religion that tolerates no heresy," Mahathir said. "This is rather unfortunate, for globalization, if properly interpreted and regulated, can bring about a great deal of wealth and benefit to the world."

Mahathir has taken pride in Malaysia's rapid rebound from the financial crisis five years ago compared to neighbors like Thailand and Indonesia, who followed painful IMF restructuring programs and have never fully recovered.

Malaysia ignored an outcry from economists at the time and imposed capital controls and pegged the currency to the US dollar to tame an economy-killing volatility.

The move was criticized but has proven successful. Malaysia's economy dipped into recession last year, reflecting the US downturn, but is expected to grow 4.5 percent this year.

"Today, only those who are blind refuse to acknowledge that we have recovered better and faster than those who applied the recommended formula," Mahathir said.

Mahathir said that governments and businesses should not be constrained by systems or ideology, but should trust their own judgment. Malaysia is not against globalization, Mahathir said, adding that foreign investments and free trade have contributed to national growth. But the benefits of globalization should be shared fairly, he said. Trade rules should be strengthened to provide "a predictable, fair and stable multilateral trading system."
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