No one wants to know how much coruption floats inUMNO election , although the float might be a flood from dubious sources.. Their cover stories are devoted to who is sleeping with whom, or, more likely, pretending to sleep with whom. UMNO members are sometimes required to manufacture an affair as part-launch publicity even when it is obvious, from body language, that the umno members are heartily sick of each other.
Datuk Seri Anwar Ibrahim revealed today that it was Tun Dr Mahathir Mohamad who had ordered him not to punish Tan Sri Nor Mohamed Yakcop despite his role in the 1992 Bank Negara Malaysa (BNM) forex scandal, which cost the central bank some RM30 billion in exchange losses.The truth is more like Dr M and his stupid Finance Ministry tried to outsmart foreign currency speculators and make a killing and got outplayed like naive dimwits. These Ministry fellows got promoted to hide the truth and the shame. Soros was just the fellow to blame becuase no body would believe him.
Anwar explained that his jurisdiction as the finance minister at the time had only allowed him to force Nor’s resignation from the bank and order for his removal from any involvement in the country’s financial affairs, whether public or private.
“Dr Mahathir ordered, ‘don’t touch him (Nor)’. The prime minister at the time did not agree with taking action because he said, ‘If we make profits, you praise him (Nor), when we make losses, you want to torture him’,” he told a press conference in Parliament today.
Anwar, who now leads the federal opposition Pakatan Rakyat (PR), was forced today to divulge details of his role in the multibillion ringgit BNM scandal, which had taken the central bank a full decade to recoup its losses.
The issue was revived during Question Time in Parliament this morning when Lim Guan Eng (DAP-Bagan) asked the government to state the actual losses suffered by BNM in the foreign exchange market between 1990 and 2012.
The DAP secretary-general later stood to ask why Nor, who has been named as among those to blame for the losses, had not been punished for his role but was instead made the second finance minister under the Abdullah administration.
Nor is currently a minister in the Prime Minister’s Department within Datuk Seri Najib Razak’s Cabinet.
Anwar explained that when he first took over the finance portfolio in 1991, BNM had never filed any report indicating that it was involved in forex trading to the sum of billions.
He said when the matter was first exposed internationally, he had sought an explanation from then-BNM governor Tan Sri Jaffar Hussein, who denied any knowledge or involvement in currency speculation.
“Jaffar told me he had no information, apart from what is being handled by Nor whose work scope evolves specifically around the forex trade and who has a direct channel to the PM and the Finance Ministry.
“Like what Dr M repeatedly said when he was PM, we are not involved in forex trading, except a minimal amount in order to protect the value of the ringgit,” he said.
“That is why, when we first debated BNM’s reports in Parliament in the earlier stages in 1993, we only read the bank’s statement that said these losses are under control, that they were only paper losses,” he added.
Anwar said it was then that he had, “for the first time in Malaysian history”, directed BNM to halt all forex trading activities, after it was discovered that the bank had recorded colossal losses in the foreign money market.
Anwar said although he was certain that Jaffar had no direct involvement in the matter, the latter moved to resign his post as BNM chairman.
“Since then, every year, BNM had to amortise, cut from the budget around half a billion ringgit to foot the losses incurred.
“There are estimations saying that the losses had run up to between RM20 billion and RM30 billion and I believe (current BNM governor Tan Sri Dr) Zeti (Akhtar Aziz) can validate that now because she is among those who believe the losses could be up to RM30 billion… BNM took 10 years to recoup its losses,” he said.
But despite the scandal, the veteran politician pointed out that Nor was later appointed by Dr Mahathir to be the finance ministry’s adviser.
When Tun Abdullah Ahmad Badawi took over in 2004, Anwar recalled that Nor was elevated to the position of second finance minister.
“Imagine, a person who caused the country RM30 billion in losses had his record deleted, his position restored and then promoted from an adviser to a full minister,” Anwar said.
He said he was “very certain” that BNM has all the records on the scandal that would validate his claims.
During Question Time in Parliament earlier, Deputy Finance Minister Senator Datuk Donald Lim Siang Chai had dodged a question on why the government had failed to punish those at fault for the forex losses, pointing out to the that it had been Anwar who was finance minister at the time.
“If you (Lim) want to know more about this issue, its best you discuss it with your neighbour in Permatang Pauh,” he said, referring to Anwar.
Suaram is a body that is apolitical and operates on the basis of social justice for all Malaysians. Founded in 1989 the aims and objectives are for the protection and promotion of human rights and the development of public awareness in Malaysia.
As reported, UMNO leaders have insinuated that the American non-governmental organisation (Open Society Institute presently called Open Society Foundation) that funded Suara Rakyat Malaysia (Suaram) is linked to currency speculator George Soros.
To promote democratic government
It was alleged that Open Society Institute (OSI) channelled funds in excess of US$ 180,000 (RM558, 556.92) to Suaram the period 2007 to 2010.By virtue of this – the Soros factor – UMNO is beating the political drum to dupe the rakyat that it is “immoral” for Suaram to accept money from the organisation.
Suaram cannot be blamed even if it has received the funding. The network of Open Society Foundations or OSF (named Open Society Institute or OSI until 2011), is a grant making operation started by George Soros, aimed to shape public policy to promote democratic governance, human rights, and economic, legal, and social reform.
OSF works to build alliances across borders and continents on issues such as combating corruption and rights abuses. This is far from any anti-money laundering or pro-terrorism activity that can be classified under the Anti-Terrorism Financing Act 2001.
Suaram has no record whatsoever of being a body that promotes terrorism. Neither is Suaram in cahoots with Soros to damage the country. Yet, to some UMNO leaders Soros was alleged to have “damaged” the country’s economy in the past.
Soros was never the “devil”
For political reasons, the chorus calling for the demonising of Suaram has included many other pro-UMNO NGOs and also the former Prime Minister, Mahathir Mohamad. They feel that it’s wrong to accept aid from any organisations that are connected to Soros.
Little do these armchair politicians or proponents of virtues realise that Soros was never the “devil” that caused the 1997-98 Asian Financial Crisis that involved Malaysia. As for Malaysia the real “devil” could have been leaders from among UMNO’s rank and cronies.
Soros was politically perceived by Mahathir as the perpetrator of the 1997-98 Asian financial crisis. Soros was the individual who sabotaged the country’s economy, so was the allegation by UMNO leaders echoing what Mahathir had said about Soros during the financial crisis.
Both Soros and Mahathir were actually into currency speculation but the former was too nifty for the latter. In fact, currency speculation was nothing new during Mahathir’s tenure as Prime Minister.
The Malaysian economy was actually incapacitated a few times by local currency speculators more than what Soros had done in Asia.
It was bad governance; an economic bubble and the involvement of local currency speculators who made Malaysian economy vulnerable and the country lose billions when Bank Negara started the FOREX business well before 1997. It was known in the forex markets as the “rogue speculator” for its aggressive trading.
Soros is a businessman
Soros is a businessman who knows about the economy and of course the prime interest of any businessman is to make money. Mahathir was a politician who knew little about the economy but tried hard to become a currency expert.
But being economically handicapped at the time he had to depend on some of his trusted “expertise”(Nor Mohamad Yakcop). When politicians and their inept cronies get into business, more often than not they damage the economy.
It was alleged that more than US$6 billion was lost in the FOREX market during Mahathir’s tenure as Premier. Malaysia’s foreign reserve was gambled away in 1992-1993. In fact it was alleged that Bank Negara, during Mahathir’s time, was involved in global speculative activities tacitly as early as in the 1980s.
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Mahathir’s penchant for mega projects
Mahathir’s penchant for mega economics projects did not work either. It only exacerbated the situation when investors had low confidence of the nation’s economy. Investors trickled in only for quick gains.
More than RM6 billion was unnecessarily spent to build Telecoms tower in Kuala Lumpur and the high rise PETRONAS buildings that did not benefit the country much. The multi-billion ringgit national car project went awry and the buying of the RM300 million Lotus racing car plant did not bring much benefit to the national car industry.
The bailing out of failed companies and Bank Bumiputera perpetually dented the nation’s coffer at the time. Billions of Employee’s Provident Fund and PETRONAS dollars were used to bail out projects given out to cronies at inflated prices without tenders and all this incurred a big financial loss to the country.
More than a billion was lost for the “purchase” of the Skyhawks from the US that was not delivered to the country. RM6 billion was lost in Perwaja Steel Mill. More than RM3 billion was burnt in the BMF scandals. Cronies were allowed to borrow millions from local banks without collaterals that ended up becoming non-performing loans.
More than RM3 billion was lost from the London Tin scandal when the US released their Tin Stockpile. From 1992-93 the country experienced more than US$6 billion FOREX lost by Bank Negara. The list goes on.
As usual, the economic buffer was the hard-earned PETRONAS dollars – without which the country would have gone bankrupt.
Both shared a common desire
Just before the financial crisis economists warned Mahathir that if Malaysia did not manage its economy and finance right, it would suffer the same fate as countries that had observed their currencies tumbling.
In 1992 the battleground between Mahathir and Soros was the London foreign exchange market. Britain’s FOREX market was the focus of many speculators who wanted to profit from the market instability at the time.
Both expected that they were going to make money from speculating on the British pound. Mahathir expecting the pounds to appreciate gave the green light using billions of US currency from Bank Negara’s foreign reserves to speculate on the British pound sterling.
Soros – the global FOREX player – expecting the fall of the pound borrowed 10 billion pounds from British banks and changed the money to German Mark.
Malaysian speculator, Mahathir lost
On Sept 16, 1992, unable to stand the economic and market pressure on its overvalued pound, Britain, instead of floating the pound, officially devalued its currency causing the pound to fall.
Soros, who took the loan from the British banks, repaid it in pounds which was then cheaper and pocketed the difference of more than US$1 billion.
While the Malaysian speculator Mahathir lost about US$4 billion.As reported, later in 1993, Bank Negara again lost another US$2.2 billion in speculative activities. Malaysia’s total loss by this time stood at US$6.2 billion. The actual figures for Bank Negara losses were never revealed, though.
Both the “gamblers” had the same desire – to make money. But in the end when Mahathir failed, Soros made the money. The stark difference here was that when Mahathir used the nation’s money to bet, Soros used his own fund. The latter of course was more righteous in this game of FOREX gambling.
Why then demonise Soros and his charity work? The only reason must be because he was perceived by none other than Mahathir that he was a currency speculator. For political reasons, leaders within UMNO have forgotten and forgiven Mahathir for his past “gambling” habit.
Lack of investor confidence
Soros earned a billion dollar profit from speculating against the British currency in 1992. Malaysia got her fingers burnt.
Preceding the 1997-98 Asian financial crisis the annual economic “growth” rate of Malaysia was reported to be 8.5 percent for 6 years – from 1990 to 1996.
But a lack of investor confidence soon attributed to a wave of currency depreciation in the inflated economies of Asian countries at the time. Soros being a shrewd currency speculator could foresee the economic collapse of a few Asian countries.
In mid-1997, when the Thai Baht depreciated his fund managers sold US$10 million of Thai baht to make a fortune. He did not sell Malaysian ringgit or any other currencies. The depreciation of the Thai Baht was enough to lead to a domino effect on some other Asian economies, including Malaysia.
It only showed that the economies of these countries were not resilient enough.Short-term investors pulled out their funds in droves resulting in the economic crisis in Malaysia. The value of the Malaysian currency fell by more than 50 percent from RM2.50 to RM3.80 to US$. The stock market index dropped and at one point hovered around 300 points.
The “Mahathir factor” too affected the stock market then. The country’s stock market fell each time after Mahathir spoke against the economic market system.
To Soros, currency speculation is a business. He confessed that he had no time taking part in currency speculation for political purposes.
A serious business
Before June 1997, there were already signs on the wall that Malaysia would face with economic problems but this was ignored by Mahathir citing “sheer jealousy” of western countries as the reason.
During the crisis it was the low confidence level of investors in the country that led to huge capital flights sensing that the economic bubble was going to burst. Even prior to this crisis the economy of the country did not justify to the confidence of markets – a reality that Mahathir did not want to admit.
After being badly mangled, the aftermath of the financial crisis made Mahathir say that currency trading is unnecessary, unproductive and immoral during the IMF and World Bank meeting in Hong Kong which took place in mid-September 1997.
But the same was not mentioned after Bank Negara lost US$6 billion or more in FOREX trading. UMNO leaders cannot be too naïve not to comprehend this setback to the nation’s economy.
To Soros, currency trading is business and weak governments have to be cautious not to create a bubble burst upon being tested by currency traders. Managing a nation is a serious business.
Singapore, Brunei and Japan, for instance, were the least affected during the 1997/98 financial crisis because of their economic resilience.
Other UMNO leaders did not dare question or speak up against Mahathir, instead danced to the master’s tune in blaming Soros for the latter’s self-made debacle.
UMNO is always good at finding scapegoats. Instead of opening up the case relating to the Scorpene Scandal the leaders are trying to strike Suaram with the “Soros factor” – exploiting on the fund Suaram received from OSI.
However, the rakyat are not that irrational to buy UMNO’s political ploy. They are just fervently waiting for the French court to reveal the truth about the Scorpene Scandal that involves UMNO, the country’s top leadership and his cronies.