and the relevant passage comes at the end of para 14 --
"Today, we are also emphasizing a more carefully-sequenced approach to capital account liberalization. And I have no hesitation to recognize that the use of capital controls in exceptional circumstances should not be a taboo. But I also note with interest that their application in Malaysia during the Asian crisis was only temporary."
The last sentence reads like an attempt at some face-saving, although it is true that, other than the ringgit peg, the rest of the controls are effectively gone.
Local papers didn't cite the speech. Following is a sample of the reporting, this one from The Star http://thestar.com.my/
Thursday September 4, 2003
Mahathir was right, says IMF BY JAGDEV SINGH
PUTRAJAYA: The International Monetary Fund (IMF) said Malaysia's approach to peg the ringgit in dealing with the Asian financial crisis was the correct move.
"With hindsight, we have to recognise the good performance of the economy. Mahathir was right," said the fund's managing director Horst Kohler, referring to the decision in September 1998 by Prime Minister Datuk Seri Dr Mahathir Mohamad in the aftermath of the currency crash.
"The performance of the economy since the crisis shows that he is right," Kohler told the media here, yesterday.
Malaysia pegged the ringgit to the US dollar five years ago and introduced a host of other capital controls, most of which have since been abolished.
The introduction of the peg and the variety of capital controls had originally met with scepticism from numerous quarters, including the IMF.
In 1999, however, the IMF conceded that the currency controls had produced more positive results than many observers had initially expected.
Kohler said the move to peg the currency had worked as "shock absorbers" for the economy when it was dealing with the crisis, but added that it may be time now to take a re-look at the ringgit peg.
"This does not mean that this formula can't and should not be reviewed. But let us discuss how this country can prepare for further integration into the global economy," he said.
Kohler is in Malaysia at Dr Mahathir's invitation after they met at Evian, Switzerland, last June....... [full article at site]
kj khoo