Thursday, November 20, 2008

DR M: Islamic banking could be answer to global financial woes

Islamic banking should not be dismissed as a potential solution for the ongoing global financial crisis, former Prime Minister Tun Dr Mahathir Mohamed said today.

He said those who had put in place the current financial system used were in denial and did not want to admit that the system they have been using all these while were wrong and open to abuse.

“They try to patch up here and there with bailouts. But that is not going to solve anything,” Dr Mahathir told reporters at the Fourth International Convention on Takaful and Retakaful here.

“So in the process of trying to solve the problem, don’t dismiss any idea including Islamic banking. Maybe not the whole Islamic banking, but elements of it can contribute towards stabilising the banking system of the world,” he said.

Asked if he thought that if bodies like United Nations are seeing a need for change by setting up a high-level task force to examine possible reforms of the global financial system, Dr Mahathir said: “There is a political element there.”

Earlier in his keynote address, he said two Malaysians were picked to join the high-level task force, with one of them being the Central Bank governor and another a critic of the government.
“They pick a person whom is against the government. If they want to do something, they already have an agenda,” Dr Mahathir “They must find a person who is against the government they don’t like and he is the one who is going to advise them. And he is going to be wrong because he has never done anything positive... he’s merely a critic and to be a critic is very easy,” he said.

Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz and Malaysian economist Jomo Kwame Sundaram have been appointed members of the UN’s Commission of Experts on Reforms of the International Monetary and Financial System.

Asked if he thought the RM7 billion stimulus package announced by the government was enough to stimulate economic growth during these trying times, Dr Mahahtir said “It may contribute to something, but it is like a patchwork kind of treatment.” “You have a headache because you are sick, and you just treat the headache.

That is not good enough. You have to treat the whole body,” he said.

“So this RM7 billion Panadol given may solve the headache, but there are other parts of the body that are going to be very sick.” Asked about his thought of the current domestic economic situation and if it could withstand the global recession, Dr Mahathir said Malaysia as a trading nation would be affected.

“To say that we can withstand the effects of this terrible recession is wrong. There must be an impact because we are a trading nation,” he said.

“We have to sit down and think what has gone wrong with the rest of the world and how does it affect us. We exist by selling things to 200 different countries. That’s how we built our economy, in trade. If our trading partners are not doing well, we cannot very well do well,” he added. -- Bernama via NST

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