Mahathir attacks US pressure By Peter Montagnon, Asia Editor, in London
The US is quietly putting pressure on Asian countries to limit the scope of their efforts at co-operation in the economic and monetary sphere, according to Mahathir Mohamad, the Malaysian prime minister.
Over the past year, the 10-member Association of South-east Asian Nations, Japan, China and South Korea have moved towards closer collaboration to help rebuild their economies in the wake of the 1997 economic crisis.
Issues include currency swap arrangements to help protect against the speculative flows that sparked the crisis, which leaders in Asia feel would be helpful given the absence of broader international monetary reform. But Dr Mahathir said US pressure would ensure that achievements would be modest.
"We are able to discuss minor issues, but we have not made any real progress. The idea of an Asian Monetary Fund has not taken off.
"We are talking about swap arrangements, but that has not been finalised either. So we get the sense that some people are being forced to drag their feet," he said.
Dr Mahathir recalled that Washington had objected to his call in the early 1990s for the formation of an East Asian Economic Caucus that would have excluded the US.
In response, the US pushed to set up the Asia-Pacific Economic Co-operation forum to ensure it had a say in economic matters in the Pacific.
"Although other areas in the world can form their own unions, we are not allowed to talk to each other," Dr Mahathir said.
Malaysia would not remove its capital controls or currency peg until a new financial regime was in place that eliminated speculative activity in financial markets, he said. The impetus for such change had diminished as the crisis receded.
He added that western countries that wanted greater transparency in developing markets were applying double standards. "Countries that are rich and do not feel they are at risk feel that everything is OK, and they're making a lot of money."
The formation of Apec had, meanwhile, undermined Asean, Dr Mahathir said.