These are trying times for Prime Minister Mahathir bin Mohamad. When Asia's currency crisis first erupted last summer, Malaysia appeared likely to weather the storm. Now it seems set to become the region's next big casualty. In a spirited, 60-minute interview with TIME Asia deputy editor Adi Ignatius and correspondent John Colmey, Mshathir revealed the depth of his anger and frustration. Excerpts:

TIME: How did the economy turn out so badly? what happened?

Mahathir: Nothing really happened. I never subscribed to the theory that this was going to be a short crisis. The people who said Malaysia's fundamentals were strong did not realize the strength of the people who can undermine the economy. we cannot do anything to help us recover. Anything that we do is seen as wrong and will cause a loss of confidence.

TIME: Is there anything you would have done differently?

Mahathir: No. The only thing that can stop this is if we have order in the international financial system. There is total anarchy.

TIME: Surely Malaysia did not move as fast as it might have.

Mahathir: Someone accused us of following the IMF prescription too closely. Why do we raise interest rates? Why do we squeeze credit? I replied: because we are frightened. If we were to follow the IMF any closer, we would bankrupt all our companies.

TIME: Do recent events in Indonesia have any meaning on Malaysia?

Mahathir: Yes, because Western experts cannot distinguish between Indonesia and Malaysia. They expect what happens to Indonesia must happen to Malaysia. This is self-fulfilling because they will publish their analysis and be believed. The economic attack on Malaysia will be increased. After a long time they might just notice the difference and desist Malaysia will survive.

TIME: Do you feel there has been a conspiracy against you?

Mahathir: There is no conspiracy. But I us ten to these questions and it is obvious that you have already made up your mind that we are doing the wrong things.

TIME: But thefact is, you do have a orsis at hand. How do you restore confidence?

Mahathir: We have done what we think will restore confidence. For example, helping companies that are in trouble. It is done everywhere, even in America. The savings and loans, Chrysler and Continental Bank were helped.Why is it we are not allowed to do the same thing?

TIME: let's assume speculators did bet against the ringgit in July. Why would anyone move against Malaysia now?

Mahathir: Maybe they make money out of it: buying and selling, short selling. We live in fear.

TIME: Who's running the econoony? One day someone says there will be no bailouts; the next day a bailout is announced, and so on.

Mahathir: We all say the same thing: there will be no bailouts. But we have some large companies that have non-peiforming loans simply because the currency-and their share prices-have been devalued. We are not bailing them out in the sense that they are badly managed and the government pumps in money. But when you reduce the value of the currency by 50%, all companies are going down, and we choose the ones we think we can save.

TIME: Your feistiness- is it for effect?

Mahathir: No. I am a person who feels things very strongly. I feel a great injustice has been done here. The countries of Southeast Asia spent 40 years building up their economies, and in two months, simply by devaluing their currencies, they have become poor. One should think that the world would have some sympathy, but all they can say is, "Ah, they are bad.

TIME: To what extent do you regard what's happened as a Jewish conspiracy?

Mahathir: There is no Jewish conspiracy. It is greed, sheer greed. You can make mon- ey trading currencies much easier than you can manufacturing cars and selling goods and facing the uncertainty. TIME: But in earlier comments you have singled out Jews.

Mahathir: What I said is that if people who do currency trading happen to be Jews and the countries that suffer happen to be Muslim, then people will say it is a Jewish plot. I didn't say that this is a Jewish plot.

TIME: Have your dreams been shattered?

Mahathir: I admit that I feel disappointed, fiustrated and at times very angry that the world would see the destruction of the economies of a whole region and say that this was caused by something else, while ignoring that if the currency had not been devalued this would not have happened. TIME: Maybe the currency was ave"valued. Mahathir: Even if it was overvalued, reduce it slowly. You take away 50% of your wealth, and you expect people to behave normally? Now they can't even buy food. There is not one word of blame for those people who devalued the currencies. And if I say this- I must admit it is frightening-and you publish it, the next day my ringgit will go down.

TIME: Many now accept that the world's financial system nejais reexamining.

Mahathir: Yes, and while you are examining it people are losing jobs, people are suffering. Where is the sense of compassion that we expect from those who talk about human rights, about caring? Not one word. Those are real people who have lost jobs.

TIME: Many investors were stunned when state oil company Petronas stepped in to bail out your son's ailing shipping firm.

Mahathir: People are determined to say I am helping my son. The fact is, I have been very firm about these things. I have prevented my children from going into politics. I have prevented them from going into government. I prevented them from doing business with the government all this time. But here it so happens that the shipping firm belongs to a government company. It is not my fault. I didn't make any decision.

TIME: But there's no way he could have borrowed $250 million to buy the company in the first place fhe was'n't your son. Local bankers wouldn't have lent to him.

Mahathir: How dare you say these things! He bought companies in Hong Kong. Do you think I have influence in Hong Kong? He bought companies in Germany. Do you think I have influence in Germany?

TIME: You can influenee local bankers.

Mahathir: You assume that because I am Prime Minister I must have used my power. That's why I say it is not worthwhile to answer your questions. You have it fixed in your mind that this man must be corrupt, he must be helping his son.

TIME: How has your own life changed since the onset of the crisis?

Mahathir: I have to work harder. I have to spend more time reading, trying to understand these very complicated market forces which are supposed to discipline me. I suppose I have not yet been disciplined, because I keep on saying the wrong things. That doesn't mean lam going to follow what people tell me. I am going to do things that are good for this country.

By Adi Ignatius & John Colmey
The Times June 15, 1998