A Costly Lesson For Malaysia

In crisis, truths are often revealed. The current financial crisis enveloping Malaysia has stripped away much pretense to reveal a system of politically connected crony capitalism. The system helped Malaysia generate some of the highest growth rates in the world for a decade but now has run its course. Squeezed by the twin export juggernauts of China and Japan, Malaysia can no longer follow a development strategy so dependent on inside dealmaking by a political elite. Indeed, the entire economic management of Malaysian Prime Minister Mahathir Mohamad is now in doubt.

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