According to the article published today in The Independent Singapore, the World Bank has risked criticism from some quarters in praising and lauding former Prime Minister Mahathir Mohamad, now the main opposition leader, for saving the country in the 1998 financial crisis.
The article states that in a rare splash of praise, the World Bank has profusely lauded the Mahathir Mohamad government for its brainiac moves in the aftermath of the Asian Financial Crisis or AFC.
The World Bank even said the rest of the world should learn from the Mahathir’s government resolve to fight back against the crisis, though it also said the current regime headed by Najib Razak has also contributed to the country’s economic resilience.
The report is entitled ‘Turmoil to Transformation: 20 Years after the Asian Financial Crisis’.
Only parts and parcels related to the current government at Putrajaya in the report is published in pro-government newspapers and portals.
But in the report, the World Bank said the Mahathir government quickly learned that the stabilization of the ringgit was crucial to the success of the Government’s plan.
At that time, in 1998, the ringgit had plunged to its lowest rate versus the US Dollar.
But Mahathir made a bold move by fixing the exchange rate at RM 3.8 to US$ 1.
This was “Perhaps Malaysia’s most controversial measure was to introduce selective capital controls.” said the WB in its report.
To explain it plainly for the laymen, the World Bank is saying the move by Mahathir salvaged the country and this move might have saved the country to be what it is today.
The World Bank said during the first months of the crisis, Malaysia saw a huge amount of capital leaving the country. It is called capital outflow. This resulted in the ringgit depreciating significantly (that is losing its value rapidly).
Read full story here: Mahathir praised for saving Malaysia in Asian financial crisis