Mahathir Mohamad: People Are Laughing at Western Banks’ Collapse

RIYADH — Sitting a few time zones away from the Davos gathering, former Malaysian Prime Minister Mahathir Mohamad spares a dry chuckle at the fall of the once mighty Western financial giants and masters of the universe.
“They were doing everything that [multilateral agencies] were counseling developing countries not to do to stay out of crisis,” he said about the parade of Western banks that have crumbled over the last six years due to heavy leveraging and bad assets. “They were greedy … and now people are having a big laugh.”
Malaysia’s elder statesman has delivered real zingers to the assembled luminaries at Davos conferences past, notably the view during the 2003 get together that the Bush administration was responsible for starting World War III.
This year, Mr. Mahathir isn’t attending Davos. But that hasn’t kept him from delivering a sermon from afar on one of his well-tread topics: cracks in the foundation of the Western-dominated international financial system need to be urgently fixed.
Mr. Mahathir has worked on for years lobbying to increase the weight of the developing world needs in international settings. And he had a stark message to the G-8 central banks and multilateral agencies, including the International Monetary Fund, which dictated terms of the economic bailout packages to Asian nations during the economic crisis there 10 years ago: those so-called financial wizards should have following their own prescription for economic health.
“They told us … there was a bubble [in asset and currency prices]. They told us not to increase borrowing. They told us to cut back government spending. Its advice they ignored in [their] own economies,” he said to an appreciative audience of Arab businessmen who have their own gripes about what they see as American and European hypocrisy, especially when it comes to foreign policy in the Middle East.
Mr. Mahathir counseled his listeners to heed Asian values over Western values as governments in the Middle East work to keep their growth rates positive.
“Our values are similar. Asia values the country over the individual. In the West, their capitalism is structured … so that there is always one winner and always one loser,” he said. “The system in the West has many holes. It is painfully obvious now.” - Meg cooker