MANAGING FINANCIAL CRISES

Dr Mahathir says a doctor has an advantage in dealing with crises because as a physician they deal with medical crises all the time. Their method of dealing with a crisis is by understanding the background of the problem and then diagnosing properly before attempting to cure it. This was also his approach in dealing with the 1997-98 financial crisis. As he was neither a finance man nor a banker, he had to read up on these topics to gain an understanding of how the financial crisis came to being.

He was shocked that currency speculators had so much ringgit to buy and sell but in the end he found out they didn’t actually have the ringgit but could borrow in order to enable their speculation activities. He had the central bank put an end to that by imposing currency controls. Dr M encourages businessmen to go back to doing “real business” which results in job creation and spin-off industries.