KUALA LUMPUR: Malaysia would have continued to grapple with economic difficulties if the government had not provided assistance to ‘business tycoons’ during the financial crisis which beleaguered the country between 1997 and 1998.
In a cynical tone, Tun Dr Mahathir Mohamad in his blog //chedet.cc/ posting today warned that there would have been economic repercussions if the government had chosen not to help groups deemed by his detractors as ‘tycoons’.
The prime minister started off the posting by admitting that he was directly involved in formulating the approach to help the country to weather the economic depression and preventing it from languishing further into recession.
“Yes, the way we (the government at the time) resolved the financial crisis (was by way of) helping the (business) tycoons in Malaysia. We could have chosen not to offer help and let them and their businesses suffer losses, fail and wound up.
“This would have resulted in all their employees becoming unemployed. Our export would decline and there would be no inflow of foreign capital into the country.
"The government would subsequently suffer from reduction in revenue in the form of corporate and income taxes, the majority of which was paid by tycoons.
“A majority portion of the government’s funds would be dented. Operations and developments of the country would not have been able to continue. All infrastructure (projects) would not be developed,” said the prime minister.
If such situation had occurred, Dr Mahathir said it would compel the government to impose tax against groups who are not categorised as ‘tycoons’.
“After this group who are not (categorised) as tycoons paid the tax, they would eventually become poor.
“About 70 years ago, in some countries, tycoons were murdered and their wealth was confiscated. All of their businesses and enterprises were taken over by the administration, which wanted to enjoy 100 per cent of the revenue.
“If we had wanted to, we could have chased away all the tycoons. We would not have helped them. We would have let them go bankrupt. We only helped those who were not (categorised) as tycoons.”
Dr Mahathir later put forth a question for discussion, if helping those who were not categorised as tycoons would have helped the country get out of the financial crisis.
“However, what if we helped those were not categorised as tycoons and they could not pay tax?
“That is the question.
“With that, I apologise for my actions in resolving the financial crisis (between) 1997-1998 by conveniencing the tycoons.”