Dr Mahathir - "He Ain't Heavy, He's Brother Soros."

Is This A Temporary Or Permanent Truce? Only Time Will Tell.

Tun Dr Mahathir Mohamad, who previously blamed currency speculator George Soros for the 1997/98 Asian financial crisis, says his perception of the latter has changed.

He said he has accepted Soros' explanation that he was not personally involved in the speculation of Asian currencies that derailed the economies of the region during that time.

The devaluation of especially the Ringgit then was done by other traders, the former Prime Minister told a press conference after his one-and-a-half hour meeting with Soros here.

Dr Mahathir said his views about Soros then was based on press reports and that he personally had not met him. He, however, reiterated his concern about currency speculation and the destruction it could do to the economies of poor countries, saying he was still against the activity.

When asked whether he had forgiven Soros, he said that it was not a question of forgiveness and that he had accepted that Soros didn't do it.

Meanwhile, Dr Mahathir was a picture of health when he arrived on time at 11am at the JW Marriott hotel with his daughter Datuk Paduka Marina to the flashes of camera lights before being led to the Presidential Suite for the meeting with Soros.

Soros, who is in Malaysia to promote his most recent book, "The Age of Fallibility", will be speaking at the London School of Economics' 20th anniversary dinner tonight.

Speaking at the press conference, Soros said both of them did not discuss much about the financial issues but rather on global problems, especially concerning US policies in Iraq and Palestine.

In giving his views on the financial crisis, he said, "The responsibility does not belong to speculators but to the authorities because the authorities should decide how the market should function". Soros said that as a speculator he acted according to the prevailing rules. "But knowing the market, I believe sometimes it is appropriate to impose some restrictions on capital moves," he said.

When asked to comment on Malaysia's management of the currency later, he said the authority made a mistake of keeping the fixed exchange regime too long.

However, he admitted that the imposition of the capital controls had managed to reduce the damage faced by Malaysia.

As for his views on the world's financial front, he said the basic imbalance was a result of the wide US current account deficit which he hoped could be corrected. -- BERNAMA
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