When will Malaysia leader run out of villains in currency crisis?

Malaysian Prime Minister Mahathir Mohamad has been pointing a finger at
foreigners, blaming them for his nation's economic woes. Well known for his
antiWest rhetoric, Mahathir crossed a nastier line last week by blaming
his troubles on "the Jews." He knows full well that the free fall in
Malaysia's currency, the ringgit, and other disruptions are, in part, of
his own making.

The prime minister has produced no evidence that foreign currency
speculators triggered the 20% drop in value of the ringgit since July, when
a financial crisis began to engulf Thailand, the Philippines and Indonesia.
First he blamed the problem on currency speculation by American financier
George Soros. Then last Friday, in remarks reported by the Malaysian
government news service, he suggested that Jews who "have an agenda " were
responsible for the economic problems in the Muslim country.

In fact, it is the prime minister's words and actions that are battering
confidence in Malaysia. In August when the stock market slumped, he
introduced a ban on certain types of securities trading. That only worsened
the market and the ban had to be lifted. In September at a Hong Kong
meeting of the World Bank and IMF, he made his accusations against Soros
and threatened to ban trading in the ringgit altogether. The result: It
plummeted to a new low.

While he tries to shift blame, the economic setback is forcing Mahathir to
scale back his ambitious plan for an industrialized Malaysia by 2020, this
after a decade of 8% annual growth. Interest rates remain low, further
undermining the ringgit. Banks, meanwhile, have to deal with a large volume
of nowdubious loans granted in better times.

Fanning nationalistic fires with antiforeign rhetoric won't get Malaysia
out of this mess, and Prime Minister Mahathir should know that.