The Malaysian Prime Minister, Mahathir Mohamad, has reiterated his warning that unchecked market forces are having a damaging effect on developing countries and on the global economy as a whole. In an address to business leaders, Dr Mahathir said the worsening turmoil on Asian financial markets, which threatens to overshadow the Vancouver summit, was proof that the ideology of the free market had been taken too far. Our South East Asia correspondent, Simon Ingram, reports from Vancouver that with growing fears that Asia's financial problems could spread still further afield, the Malaysian leader's comments may not be so readily dismissed:
When the currency and stock market crisis erupted in Malaysia and elsewhere in South East Asia last July, Mahathir Mohamad's attempt to blame foreign speculators was seen by many as an attempt to side-step criticism of his government's own policy failings. Undeterred, the Malaysian leader has pursued his campaign for some sort of rules to govern the operations of global financial markets and prevent the rapid and damaging outflow of investment funds to which his country and others have proved so vulnerable. Speaking to an audience of business leaders, he again warned that for the developing world at least, the consequences of inaction would be devastating:
"Power corrupts. As much as government can become corrupt when invested with absolute power, markets also can become corrupt when equally absolutely powerful. We are seeing the effect of that absolute power today, to the impoverishment and misery of millions of people and their eventual slavery."
Ordinarily this is not a view calculated to win much backing in a forum like APEC, created precisely to further the goals of trade and economic liberalisation. But, with the banking and stock market turmoil now spreading to Korea and Japan and amid growing fears of a global financial meltdown, the Malaysian leader's arguments are less easily ridiculed. The message from President Clinton and others has been that for Asia's troubled economies a dose of stern IMF medicine should be enough to turn the situation around. But the possibility that even the United States could be hurt by Asia's woes may have given Dr Mahathir's arguments more than a dash of credibility.