Mahathir defends his handling of 1990s Asian financial crisis, Latest World News - The New Paper

Mahathir defends his handling of 1990s Asian financial crisis

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PETALING JAYA: Dr Mahathir Mohamad has defended his method of handling the Asian financial crisis in the late 1990s during his earlier tenure as Prime Minister.

In his blog yesterday, the Pakatan Harapan chairman admitted to bailing out tycoons during the crisis as it was one of the best ways to minimise retrenchment.

"Of course, it would have been better if we didn't help the tycoons and let their businesses plummet. Then their employees would lose their jobs," he said.

"Our exports would also fall and there will be no foreign funds flowing into the country."

The Langkawi MP said not helping the tycoons at the height of the crisis in 1997 and 1998 would have had a further domino effect on the country's economy.

He said that by not bailing out the tycoons, the government risked losing revenue from corporate and income taxes, thus impacting government coffers.

"A big chunk of those taxes came from tycoons and losing them would have led to less government funds that would have affected the country's development and operations. We could not have built any sort of infrastructure."

He also said that not helping the tycoons would affect regular workers as they would have been hit by higher tax rates to make up for lost revenue.

He said: "With less corporate and income taxes from the tycoons, we would have had to impose taxes on the non-tycoons that would only bring them down to poverty level."

Dr Mahathir, who is well-known for being sardonic and witty, "apologised" for his method in handling the crisis and asked if there were better ways to have managed it.

"We could drive away all the tycoons and not help them at all. Let them go bankrupt and focus all our efforts on helping the non-tycoons.

"But how can we help the non-tycoons without revenue from the tycoons' corporate and income taxes? That is the question."

It was unclear what led Dr Mahathir to revisit criticism of his handling of the crisis. - THE STAR