Financial crisis and bailouts
I was in England recently and the newspapers were full of dismal reports on bank and business failures, the closure of well-known businesses like Woolworths and Baratt, the increases of unemployment rate with some 700,000 professionals among the 2 million laid off or unable to get jobs. And there were lots more bad news.
2. The British Government is busy bailing out banks and companies with hundreds of billions of pounds but the economy seemed to have gone into recession despite all these efforts. There is no sign that the crisis is on the mend.
3. Malaysia can feel vindicated because all the things we did in the 1997 – 98, crisis, which were condemned by the economists of Europe and America, are now being done by them blatantly and on a massive scale. They talk about trillions of dollars and hundreds of billions of pounds in bailouts. Where the money is coming from is not revealed. Have they been keeping these huge sums for such an emergency?
5. This is because the banks and businesses we bailed out did not get into trouble because they abused the systems or indulged in fraud. They were forced into that situation because the currency was devalued by currency traders and they found themselves unable to meet their commitments. Once they gained access to funds through bailouts they were able to do business again and to repay the money they had received.
6. They were able to do this because, although Malaysia was in recession, the rest of the world was not. There was much less constraint in doing business.
