Malaysia hits out at `economic saboteurs'

Malaysia yesterday announced draconian measures against speculators, as the Malaysian ringgit fell to its lowest-ever level against the dollar. One trader talked of "total exodus".

There were suggestions that local speculators may be arrested for economic "sabotage", under the terms of Malaysia's Internal Security Act.

At the same time, a Canadian journalist was sentenced to jail for contempt of court, in connection with an article which caused offence to a senior judge.

The government blamed "economic saboteurs" for the collapse of the ringgit and for the recent heavy falls on the stock market which has lost 40 per cent of its value this year.

The Prime Minister, Mahathir Mohamad, has publicly described George Soros, the best-known player of markets in the world, as a "moron". Blaming foreigners for Malaysia's new economic woes, he complained: "We cannot allow ourselves to be dictated to by external parties."

The government's measures include limiting ringgit swaps to $2m to foreign customers, and a programme to buy back stocks from foreigners at market prices instead of at a premium from locals. Mr Mahathir made no bones about the significance of the new measures, saying: "We have decided on retaliation."

Robin Cook, the Foreign Secretary, was in Malaysia last week on a four- country tour of South East Asia, boasting of the good commercial links between Britain and Malaysia, while insisting, too, on the paramount importance of human rights. He approvingly quoted the fact that Mr Mahathir had talked about feeling "comfortable" with Britain.

But Mr Mahathir and the Malaysians have made it clear in recent days that that "comfortable" relationship can also be accompanied by a snarl. Things are not as bad as during the "Buy British Last" campaign, which Mr Mahathir launched in the1980s, but this is not an easy partnership.

Mr Cook left Malaysia confident his message had been heard and even accepted. Burma, he said, would not be invited to the Asia-Europe Meeting in London in April. Mr Cook said the track record of Burma's regime meant Burmese ministers could not be granted visas.

But Mr Mahathir promptly hit back, saying any discrimination against Burma would be "discrimination against Asean".

Britain is keen to woo Asean (the Association of South-East Asian Nations). A collective snub by Asean, which Malaysia seems to be encouraging, would have disastrous implications for Mr Cook's own credibility.

Mr Mahathir had already delivered his first snub while Mr Cook was on his trip to South-East Asia. In a speech in the Malaysian capital, Kuala Lumpur, Mr Cook emphasised the universality and timelessness of human rights - a coded criticism of his hosts. Mr Mahathir argued recently in favour of modifying the United Nations declaration on human rights, saying that it had been "formulated by superpowers, which did not understand the needs of poor countries". The Malaysian foreign minister insisted that it was "very difficult to have one common yardstick which is universally applicable".

Murray Hiebert, a Kuala Lumpur-based journalist with the respected Far Eastern Economic Review, was yesterday released on bail, after being given a three-month jail sentence for an article entitled "See You in Court". The article referred to a bizarre case in which a judge's wife sued her son's school for dropping him from the school debating team. The Review article noted that the boy was the son of a judge, and implied that the case had moved quickly through the courts.

Mr Hiebert's lawyer said his client was a foreigner, and that writing about local laws was not an easy task. He also said the Review had offered to correct "errors" in Mr Hiebert's article.

Malaysia has been one of the most envied of the Asian "tiger economies" in recent years. Economic growth has averaged more than 8 per cent over the past decade and its GDP per capita is now higher than Britain's.