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Mahathir blames Jews for Malaysia's economic woes
By Alex Spillius, South-East Asia Correspondent

ALLEGATIONS by the Malaysian Prime Minister of a Jewish conspiracy to damage the economies of Muslim nations have increased doubts about his ability to govern.

Mahathir Mohamad's outburst was the latest in a series of attacks on perceived enemies, and has stunned opponents, foreign investors and diplomats. Having earlier described George Soros, the Hungarian-born US financier, as a "moron" who was deliberately destabilising Malaysia's currency, the ringgit, Mr Mahathir reminded an audience of 10,000 at a rally in the eastern state of Terengganu that Mr Soros was a Jew.

He said the government suspected that speculative currency attacks were the work of Jews. "And, incidentally, we are Muslims and the Jews are not happy to see Muslims progress," Mr Mahathir was quoted as saying by the state news agency, Bernama.

Mr Mahathir noted that Indonesia, which has the world's largest Muslim population, had also been affected by speculative attacks on South-East Asian currencies.

His comments have added to the impression of a loose cannon unable to identify the causes of Malaysia's economic woes, which have seen the ringgit fall by 18 per cent against the US dollar since July after a decade of growth. Many Malaysian businessmen questioned how much longer Mr Mahathir can last, while foreign financiers say investors' confidence will be further weakened by his diatribe.

Yesterday, Mr Mahathir tried to backtrack, saying that non-Muslim countries were also affected by currency speculators.