David, I didn't know "Sting" also provided advice on global speculation/panics :-). Speaking of Malaysia, check out this article. "Fools Rush In"? I hope Salomon isn't intending to send anyone of the Jewish faith to meet with "Dr." Mahathir...
scmp.com
Friday September 11 1998
Salomon in surprise
role for Malaysia
REUTERS in Kuala Lumpur
Malaysia has appointed Salomon Smith Barney as
an adviser to help it raise funds overseas and
restructure the country's financial system.
The move to embrace this symbol of the
free-market system comes as a surprise after Prime
Minister Mahathir Mohamad's recent attacks on the
conduct of international investment banks during the
region's economic crisis.
Dr Mahathir has effectively withdrawn the country
from the global economy after blaming foreigners
and the free markets for pushing the country into
recession.
The primary task facing the unit of the Travelers
Group will be to help Danamodal Nasional, a
company set up by the Malaysian Government to
restructure and recapitalise the country's ailing
banking institutions.
Dr Mahathir, who in a guest column in Time
magazine recently argued that unregulated free
markets had destroyed the economies of nations
and regions, yesterday defended Salomon's
appointment.
"We appreciate any help coming from any quarters,
whether they are foreign or not is irrelevant to us,"
he said when asked if he had chosen to go to a
foreign institution to enhance the country's
credibility after introducing capital controls.
"We are not anti-foreign, we are not so pro-local
that we reject something that we think will fit into
our scheme of things," he said.
Salomon co-chairman Deryck Maughan said the
measures being undertaken by the government
would "promote the strengthening of the economy".
"We expect that Malaysia will maintain the sound
fiscal position and substantial current account
surplus," he said.
Mr Maughan also said Salomon would organise an
overseas fundraising programme for Malaysia.
"We would expect to have a targeted fundraising
programme that deals with all of the major investors
in the world," he said.
"We will not be limiting ourselves to any single
market."
The prime minister said the government had not
given up relations with United States-based
investment bank JP Morgan and consultant Arthur
Andersen, which were advising Pengurusan
Danaharta Nasional, the company set up to take
over the non-performing loans of banking
institutions.
"They are still there, we have not broken away from
them," he said. "We find that anybody and all who
are willing to lend a helping hand we welcome."
In the article in Time, Dr Mahathir said the
free-market system was not infallible and had, in
fact, brought untold suffering to the people of whole
regions.
"Now we are being told that the only system
allowed is that of capitalist free markets, of
globalisation. Everyone must accept this system or
be considered a heretic and punished accordingly,"
he said.
"That the unfettered, unregulated free market has
destroyed the economies of whole regions and
many countries in the world does not matter.
"The important thing is that the system is upheld."
Last week, Malaysia turned the clock back on
decades of market-oriented liberalisation by taking
its currency out of the free-trade system and
pegging it at M$3.80 to the US dollar.
Dr Mahathir said Malaysia could not wait too long
for the world to realise the free-market system
might be wrong.
"Malaysia has chosen to become a heretic, a pariah
if you like," he said.
But he got a thumbs-up on the handling of the
economy from the newly appointed advisers,
Salomon.
Details of the fundraising programme had not yet
been worked out, he said.
"The first thing that we will do is tell the facts about
Malaysia," he said. "We will be publishing
tomorrow a comprehensive analysis of the controls
that have been put in place and their impact on the
economy and financial strength of the country."
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