foreign media

Malaysia accuses IMF of support for speculators
By Richard Northedge

MALAYSIA'S prime minister has launched a new attack on financial speculators and accused the International Monetary Fund of supporting them.

The collapse in the country's stock market and currency, along with others in South East Asia, have sparked fears that the slide may spread to mature countries' markets.

Speaking during celebrations to mark the 40th anniversary of Malaysia's independence, Mahathir Mohamad, 71, pledged to fight the speculators, saying: "We will learn to live in this jungle and we will develop the skills to handle the wild beasts which roam inside it."

He has previously blamed financier George Soros, who has denied taking positions in the currency but the prime minister has now accused the IMF of supporting the speculators.

The IMF told Malaysia that the currency crisis is a warning that it should slow down construction of expensive capital projects such as the Ł4.5 billion new airport, a Ł7.5 billion dam and an Ł11 billion government administration centre.

But Mr Mahathir said: "That is what the IMF has been saying all the time. Because we didn't slow down, they are now very happy that the actions of the foreign investors have shown that they are right.

"The IMF is only interested in saying 'I told you so,' even if they had to subvert our economy just to prove that they are right." The IMF last month organised a rescue for Thailand, whose currency and stock markets have been similarly hit, but Mr Mahathir said: "The baht is still sliding and the Thai economy is still in bad shape after borrowing $21 billion from the IMF. So why do you borrow from the IMF if it is not going to help at all?" The accusations will strain relationships further between the country and financiers trying help it and could cause markets to fall again this week. On Saturday, the Taiwan stock market fell .75pc.

The Philippines, which accepted an IMF rescue three years ago, admitted yesterday that its public sector borrowing requirement is 42pc higher than the agreed limit of 11.6 billion peso. The government has asked the IMF to extend its package for four months because of the region's crisis.

The Malaysian prime minister last week unsuccessfully attempted to stop the fall in share prices by banning investors from taking short positions and encouraging local investors to buy shares.