Tun Mahathir on the economy outlook.

Tun Mahathir: See The Results Of Earlier 2 Packages First

KUALA LUMPUR, Oct 22 (Bernama) -- The government needs to audit the results of the earlier two economic stimulus packages before introducing a third package to ensure that it is necessary for the economy, said former Prime Minister Tun Dr Mahathir Mohamad.
"What the government needs to do is to make a full audit of the results of the stimulus packages. Of course, if it is good, we should have more," he told reporters after delivering a talk at the 21st Federation of AFRO-Asian Insurers and Reinsurers conference here on Thursday.
Mahathir was responding to a question on whether Malaysia needed a third stimulus package to further boost the economy on top of the earlier packages totalling RM67 billion announced this year.
Research houses and analysts have been proposing the idea of a third stimulus package to further bolster domestic economy.
The former prime minister said there were many things to be done to determine the direction of the country as Malaysia has come to a different stage of development.
"What we did during my time cannot now be done because it is not going to work," he said.
Foreign direct investments alone is not enough, and the government should look into the kind of FDIs that the country needs now, he added.


Increase Savings To Cushion Economy Against Attacks - Tun Mahathir

KUALA LUMPUR, Oct 22 (Bernama) -- Former Prime Minister Tun Dr Mahathir Mohamad has suggested that developing countries develop a healthy savings regime as it can help cushion the economy when attacked by foreign currency traders.
With a high savings rate, the country would have the financial resources to finance its economic development and recovery and not depend on external forces which might want to control the domestic economy, he said.
Dr Mahathir said the rules and regulations governing trade and industry must be structured that the country would not be too exposed to the changes in the international business regime.
As such, "the countries may be forced to build protective barriers and reduce foreign borrowings," he said in his speech at the Asian Insurers and Reinsurers Conference organised by Malaysian Reinsurance Bhd here on Thursday.
Dr Mahathir said it was imperative for emerging economies to take into account the threats posed by the new business environment and prepare for various eventualities.
For example, in the 1997-98 regional financial crisis, the countries of East Asia, including Malaysia, were attacked by currency traders, he said.
"By the traders devaluing the currencies of these countries, their economies could be destroyed. Even the offer of help from international institutions can be destructive to a country's economy," Dr Mahathir said.
He also warned that excessive inflows could result in foreign capitalists dominating the economy of a country which could be damaging if they pull out capital anytime they think fit.
Against such a backdrop, Dr Mahathir said: "Clearly, the geopolitical changes happening are relevant and are already having a lot of effect on the emerging economies."
"Much depends on how these economies manage their own governance and the politics of their country," he said.