Limit E Asian Community to ASEAN, Japan, China, S Korea: Mahathir

May 26, 2006

This is a transcript of a dialogue session between former Malaysian Prime Minister Mahathir Mohamad and Japan Center for Economic Research Chairman Akira Kojima. Mr. Kojima and the moderator spoke through an interpreter.

Moderator: Excellencies, ladies and gentlemen, a very good morning to you. We would like to welcome you once again to the 12th International Conference on the Future of Asia. My name is Mami Yamaguchi, and I have the pleasure of continuing to serve you as the MC of this conference. I would like to thank you for your patience, but now we would like to begin the second-day program of the 12th International Conference on the Future of Asia. We have His Excellency Tun Dr. Mahathir bin Mohamad, the former Prime Minister of Malaysia, and Mr. Akira Kojima, Chairman, Japan Center for Economic Research. They will be having a dialogue before us. We would like to invite both of them onto the stage.

Kojima: Good morning. Together with the participants, I would like to welcome the great leader of Asia, Tun Dr. Mahathir. This is the second day, but from the early hours of the morning we have the prime time program. We will spend the next 80 minutes together. I hope that in the last 20 minutes of the program, as His Excellency wishes to do so, we would like to have interaction with the members of the audience. Of course, Tun Dr. Mahathir requires no explanation about his credentials. In 1990, he has proposed the concept of EAEG. Many discussions took place on that concept. You will note that last year, Malaysia hosted the first East Asian Summit Meeting. A concept to design a better future of Asia. And I think it is symbolic and a great tribute to an architect from Asia, Dr. Mahathir, who had worked so hard to put together this vision. I'm sure he has given many thoughts on the future of Asia. In the 1990s, no one, or very few, dreamed that Asia would indeed be able to discuss seriously about creating a community of its own, because the remnants of World War II has divided Asia, and no one dreamed that we could be one. Each country was busy recovering from the ashes of the war, or rebuilding or building its national economy and livelihood of the people. Europe had a different identity. Their history was of coordinating their sovereignty, and trying to make concessions to delegate more and more authority to Brussels. Asia's process was different. We had to start from scratch in creating or establishing the sovereignty. It was not taken for granted that the countries had sovereignty, but Asia did remarkably well, and now we are seeing a conspicuous shift of the gravity of the center of activities to Asia from elsewhere.

When His Excellency assumed the Prime Ministership of Malaysia, he must have foreseen that, he must have had such a vision, and since then he has tried to realize this vision through his words and deeds. So, now, to you, Sir, Tun Dr. Mahathir, the East Asian Summit in Kuala Lumpur was a major leap forward, and it really allowed people to engage more about the East Asian community and also the future of Asia, and I would appreciate your summary introduction into this subject.

Dr. Mahathir: I thank you very much for this opportunity to speak, once again, on a subject which had interested me for over a long period of time. When the idea of the East Asian community was suggested, it was really a response to the situation in the world at that time. The GATT meetings had not succeeded well, and at the same time, the Europeans were moving very quickly towards a European Union, and the states in the North American continent were forming into NAFTA, the North American Free Trade Association, which included the United States of course, Canada, and Mexico. Now, these are very big entities, very big units, and it is impossible for the small countries in East Asia, or even the big countries in East Asia, to discuss international problems or to take up issues regarding trade, each one by itself. There is a need to come together, so that we speak with one voice, and therefore, there was this idea of an East Asian Economic Grouping, EAEG, subsequently, it was called the East Asian Economic Caucus. But whatever may be its name, the thing is that we would like to have the East Asian countries, namely, the southeast Asian, and the northeast Asian countries, come together so that we would be able to voice our opinions in international negotiations particularly with regard to trade and financial regimes. So that would enable us to balance the force of the European Union and NAFTA. Fortunately, of course, there were objections to the formation of the East Asian economic grouping. I really couldn't understand why, because people should be free to come together just as East Asians have never objected to the formation of the European Union or NAFTA. Other countries should not object to the East Asian countries coming together. In any case, it was not going to be something like the European Union. It was mainly going to be a forum to bring us together to discuss common problems, common issues, hopefully to reach a common stance, so that when we go to international negotiations, we speak with one voice, just as the European Union and NAFTA would be speaking with one voice. So then, there will be a balance in the strength of the opinions of all the three groupings. It took a long time before this idea was finally materialized. The Korean president suggested "ASEAN + 3", the three being South Korea, Japan, and China, which is Northeast Asia, and the rest, ASEAN, of course, Southeast Asia, so in effect, this grouping would be the East Asian economic grouping. However, last year, when they met in Kuala Lumpur, they brought in Australia and New Zealand. I don't believe that they fit in at all, because their attitude and their way of thinking represents really the thinking of the Europeans and the Americans, and they will not be able to understand the needs of the Asian needs in East Asia. I did not feel happy about this inclusion, but I thought that that should be EAEC plus two, and EAEC, or EAEG, should remain bringing together a forum which is confined to Southeast Asian countries and Northeast Asian countries.

Kojima: What about India? So addition of India also is no problem? When you say "plus two"?

So, ASEAN Plus Three, and in fact at once time it was called 3+ASEAN, and then among the three, China is dominant, so in Asia, the new order centering around China may be created, but in order to adjust it, the addition of India may be a good counterbalance, and this kind of discussion took place. Now, when we think of the Asian community from now on, how would you position India in the entire picture?

Dr. Mahathir: Well, at the time when the EAEG was promoted in 1990, India was really not progressing very well. It was still a very closed country, a very closed society, not wanting to integrate with the rest of the world. But since then, India has changed its stance, and now India is a much more open country willing to accept foreign investors, willing to interact with foreign businesspeople, and therefore, India should be considered as one of the members of the grouping. Well, with regard to China being balanced by the entrance of India, I think we should not be thinking about who is going to dominate the East Asian community. We should think of equal voices coming together, equal people who are not going to dominate the grouping. Once you have domination by any country, whether it be China, or Japan, or India, then it's not going to work very well. In any case, this is a forum. It is not a union, like the European Union, and we are not having even a NAFTA kind of arrangement; we are just suggesting that on certain occasions, in order to deal with certain issues, we should come together and discuss these common issues, and hopefully we would reach a common stand in order to ensure that East Asian countries will benefit from whatever trade regime, or financial regime, that is proposed by Europe or NAFTA.

Kojima: So I would like to pose you a series of questions to understand in greater depth your vision into the future. But before doing so, we would like to reflect back the history. In a long history, Asia had suffered long years of stagnation. People said that Asia would not grow. That was a long time ago. However, in the 1980s and 1990s, Asia demonstrated remarkable successes, achieved great growth and development. The World Bank has issued the report that said "Miracles of Asia". So people are looking at this miraculous development. And many people tried to come up with theories to explain this, but the theories came later than the reality. Asia was that dynamic. So, for the people who advocated the sluggishness or stagnation in Asia, they never predicted for Asia to be so dynamic and developing. But of course, after the Asian miracle, your country, Sir, and other countries, were face with a financial crisis, and were required to make economic adjustment. Again, the miracle theory would not be able to explain why that crisis happened. Some people said that the Asian crisis was a result of the crony capitalism, that results were found within Asia, and not external factors, and since it was structural, once the crisis started, it will prolong, because it will be difficult to adjust because it is an internal factor. However -- so that was the view of some -- but Malaysia took a different approach in overcoming that crisis. And in any case, in a very short period of time, your country achieved a remarkable recovery. So again, the people who advocated crony capitalism could not explain why you were so well recovering from the crisis, and they could not foresee such development. Dr. Mahathir, in those days, was critical about hedge fun, such as by George Soros. George Soros, in 1998, wrote a good book that was the name of the book, the "Crisis of Global Capitalism." So it was a crisis of not Asia, but the crisis of the global capitalism, there was just too much money, and the flow of funds could be too violently moving. There is a violent move of the funds. So I think George Sorrows drew a conclusion, later, which is very similar to your view. And also, on the IMF, there was this question of architecture. 60 years after World War II, the structure of the world economy has transformed. Therefore, the international currency system itself, the regime, has to be revisited, and the monetary system will have to be redesigned and have a new architecture. So the world is having troubles trying to keep abreast with the dynamic growth of Asia. Now, I talked about the present. Now in discussing Asia today and in the future, what sort of vision and theories would be fit? Could you give us some indications about what theories and what visions should we have when we discuss about the present and future of Asia?

Dr. Mahathir: Thank you very much. I think it is, in order to understand what is happening, it is important to remember history. But on the other hand, of course, we should not be tied down to our past, to the extent that we can not make corrections and can not do what is necessary fro the present. Now, history has many lessons for us. And there were so many things that we did which were wrong, which we must avoid now. We see the difference between the Asians and the Europeans. Now, the Asian countries, China, Japan, Malaysia, Southeast Asia, India, the Arab countries, we were trading for more than a thousand years before the European traders arrived. And we were trading quite peacefully. There was no attempt to conquer any country by any of the trading nations. And then the Portuguese came. They came to Malaysia in 1509. Two years later, they came and conquered Malacca and made a colony of Malacca. And from that time onwards, the Europeans came into Asia and of course into America, and also Africa, and their way of trading is different form the Asian way of trading. They came, they wanted monopolies, they wanted to make treaties to control trade, they wanted fortified trading posts, they bring in their soldiers, their ships were armed merchant men, and they ended up by conquering all their trading partners. Of course, Japan escaped, but Japan was forced to open up by the black ships. China was partially occupied. Only Thailand appeared to have escaped. So the European way of trading, the European attitude towards friends and foes, differed completely from the Asian way. That is why I make this distinction, because unless you understand the distinction, you will not be able to manage your relationship with the Europeans, and indeed, you failed in the past, and you may fail again in the future, unless you understand their difference or their culture.

Now, what do we see in the future? After the European empire was dismantled, there is still that desire to dominate the world, and they tried to dominate the world through trade, and of course they want always to be powerful militarily, and to use that military power to threaten others. So we have a problem here, because Asians want to trade. We don't want to conquer countries. China, which is only much closer to Malaysia, had never conquered Malaysia, but Portugal, which is 8000 miles away from Malaysia, conquered Malacca, way back in 1511. So we are not afraid of China, we are not afraid of Japan. Of course, at once time Japan also conquered Southeast Asia, including Malaysia, but at that time, Japan was carried away by European ideologies, by European culture. Japan before that did not try to conquer Southeast Asia or other trading partners. Not even China, not even Korea, but after Japan tried to follow the Western ways, then it started this idea of having an overseas empire. Now, that has created a lot of enmity between Japan and China and South Korea, and to some extent, Southeast Asia also. So if we think about the past wars between Japan and China and we cannot forget about it, then it is difficult for us to come together. It is difficult for us to reconcile ourselves. Strangely, the Europeans have been able to do that. The Germans and the French, they were bitter enemies for almost 200 years, fighting each other, occupying each other's territory. And yet, after World War II, Germany and France decided that there was nothing to be gained from war, and they were the pioneers in setting up the European Union, and today, of course, the European Union is a real thing. It has brought together very many countries in Europe, and for the longest period of time in the history of Europe, there has been no wars between the European countries. Of course, what happened to Yugoslavia is internal, but there were no wars between Germany, or France, or Britain, or the others. They are now peaceful. Unfortunately, they don't bring the peace to other countries as well.

Now, we must learn this ability to downgrade the past, and to think about the present and the future. Now, if only Japan, China, and Korea, can downgrade past enmity, and think about the present, and also the future, then it would be possible for this major Northeast Asian countries, powerful economically, to come together, and together with Southeast Asia, we would be able to form a very good grouping, not solid grouping, but a good grouping, which would be able to help each other develop their countries and also bring peace to East Asia and hopefully, eventually, to the whole of Asia.

Now, we have a problem with a lot of accusations hurled at us. Now, it is said that all these developing countries, they don't know how to rule themselves. They really shouldn't be independent. They should really be ruled by others who understand how a country should be ruled, and therefore, they think that all these developing countries would never succeed. Now, I admit that many of the developing countries were unable to govern themselves well, but when they governed themselves well, then they are accused of not doing the right thing. Malaysia, for example, is accused of cronyism. What is cronyism? Well, it seems that anybody in Malaysia must succeed only because they are cronies of the government. So if the government doesn't want to be accused of cronyism, the government must ensure that every one of us fails. If nothing succeeds in Malaysia, then there will be no accusation. But then, if nothing succeeds in Malaysia, nobody succeeds in business in Malaysia, Malaysia is not going to be able to grow. We have to work with the private sector. We have in Malaysia, officially, "Malaysia Incorporated". Japan was accused of having "Japan Incorporated", but we think it is good if the government works with the private sector, simply because the profits of the private sector, 28%, in Malaysia, the corporate tax is 28%, so 28% of the profits of the private sector belongs to the government. So when we work with the private sector, when we help the private sector, it is in order for the private sector to make profits so that we can get 28% of that profit. So what is wrong with that? There is nothing wrong, because we need the money as much as the private sector needs the money. And to make sure that they fail, is to deny ourselves the profits that we are entitled to by way of taxes.

So, I don't believe that it is cronyism which helps Malaysia to succeed. It is just good governance, and we have learned how to govern our country relatively well. Of course, we are not as good as the developed countries, the very rich, very powerful countries who are much better ruled than we are, but Malaysia has managed quite well. And we would like to be independent of foreign countries. We do not really like to receive aid from other countries. Yes, we borrow some money, but we borrow because we are credit-worthy. We are able to pay our debts. We borrow from Japan, admittedly, but that does not mean we are going to place ourselves under Japan. And when the hedge funds came into the market and started selling our currency in order to devalue it, effectively, they were trying to make us poor. Now, when we were rich, we need not borrow from them, but when we were poor, they had expected that we would borrow from them. We would borrow from the IMF, not for ourselves, but in order to pay our debts to the other banks. But we refused to do that. If you borrow from the IMF, it is just transferring the debt from one bank to another bank, and it is not helping us at all. That is why Malaysia refused to borrow from the IMF in order to pay debts, and fortunately, we did not have much by way of debts, so we did not borrow from the IMF, and we devised our own way of dealing with the financial crisis, and I'm glad that now everybody admits that the way Malaysia dealt with its financial crisis was the right way, and it did help us to recover.

Now, about capitalism, every system has a tendency to become extreme. Capitalism in itself is not bad, but when you give in to capitalism and allow capital to do anything that they like, then they are going to abuse their position, as much as the Communists abused the strength of the workers and took over the government. Today, capitalism dictates to the government; capitalists dictate to the government, and anything they do must be supported by the government. That is why they have created these hedge funds. Hedge funds are not necessary. They do not help in any way. They speculate, and in the end, they manipulate, and they reduce the value of our currency. We think that there should be a new monetary regime. The original Bretton Woods Agreement was to fix the exchange rate, not to liberate the exchange rate; it was to fix the exchange rate. But unfortunately, some of the big countries reneged on their promises to stick to the Bretton Woods Agreement, and this started freeing their currency and letting the market determine the value of the currency. Now, once you let the market determine the value of the currency, then there would be first speculation and then manipulation, and that was what the hedge funds did. They were able to sell down, to do short selling, actually, of currencies. Currencies are not commodities. They are not like sugar or coffee which can be consumed. Currencies are artificial things, just figures on pieces of paper. And today, they are not even on pieces of paper. They are on the computer screen. You can add any number of zeros and claim that there is a lot more money. All this, I think, lends to a lot of speculation, and that is going to be an obstruction to international -- to global growth.

And what is the vision for Asia? Asia should play a big role in international affairs. In the past, we were dominated by the Europeans, until our own minds, our own brains, have accepted that Europeans are superior. Now, we have proven that what we can do, we can do, and certainly, we can do better. Today, there are hardly any American cars any more. General Motors is bankrupt, Chrysler is bankrupt, Ford is bankrupt. So Asians have proven that they are better in many ways. So we do not want to be dominated by anyone, but Asians also must not think of dominating the world. We should think of the world as being made up of different countries, each with its right, and we should settle all our problems, not through tests of strength, like going to war, but rather, through negotiations and dialogues and arbitration, and maybe eventually going to the courts to settle any disputes. Asians should show the way that war is not the proper way to solve problems. Killing people -- war is about killing people, and I think if we kill people to solve our problems, we are saying that we are not civilized, we are actually primitive people, because only primitive people should kill each other. Civilized people should not kill each other, and we know killing people is a crime in any country, yet countries are building huge armies dedicated to killing as many people as possible. The question that Asians must ask is: are we civilized? Is this world civilized? And the answer, at the moment, is that we are not civilized.

Kojima: Currencies, His Excellency has always made this view known. He is a man of conviction. He is not swayed by developments, and I think it is a matter of importance. When Asia suffered the financial crisis, IMF failed, at the outset, to correct the situation. They never admitted that failure, but if you follow what IMF did after the years, they have gradually slowly changed their modality in the way they worked. So the change of the policies is admitted, symbolic, of the fact that they recognized their failure. And in those days, Japan was the center of many debates. Japan suggested the creation of an Asian Monetary Fund. So can you talk a little about IMF, how it should be today, and about the Asian Monetary Fund?

Dr. Mahathir: Well, you said that IMF has changed its modality, but to me, the change is not significant, and it has not made any difference at all to the financial regime which governs this world. The IMF still supports the operations of the hedge funds. Recently, the hedge funds were involved in dealing with the American currency, and immediately, the American government took action against the hedge funds. Now, they want the hedge funds to become more transparent. This is one business that did not become transparent during the time when they were attacking Malaysia. We don't know how much money they have, we don't know what the source of money is, and we don't know what they were doing, because they were trading among themselves. This kind of operation is very bad, and if the IMF wants to do something really worthwhile, in order to stabilize the financial regime in this world, the IMF should either abolish hedge funds or currency trading, or should make the hedge funds very transparent. Every deal should be known to the rest of the world. We know what is happening with companies. They have to be transparent, but somehow or another, we still believe that hedge funds need not be transparent, although the Americans now insist that when dealing with the US dollar, they must be transparent. So there is really no change in the IMF and the international financial regime.

There was this proposal that we should have the Asian Monetary Fund. Now, this is a very good solution. Of course, it's not really necessary, if we are able to do away with the speculations and the manipulations of the hedge funds. But for as long as the IMF supports the operations of the hedge funds, the Asian Monetary Fund would be very useful. Of course, the idea is, whenever a country is in difficulty, it should have access to funds which would help it tide over the difficulties. But it is tiding over. The difficulties will still come, and if the hedge funds are in operation, they can create the difficulties which will force the countries to ask for the help of the Asian Monetary Fund. In any case, the idea of a fund is always very good, because all countries can not manage all their finances well all the time. Sometimes, even countries like Japan will find difficulties in managing its finances, so having a fund that is a standby facility is a very good thing, indeed. Now, the IMF, as far as I can see, has not really performed its job well. It should really be helping to stabilize the exchange rate. As you know, when Malaysia was faced with this fluctuating exchange rate, we decided to remove our currency from the market, and to fix the exchange rate by ourselves. It is not an unreasonable exchange rate. It was acceptable to the market. At 3.8 to one U.S. dollar, it was devaluing the Malaysian currency, which initially was 2.5 to one American dollar. But the devaluation was necessary, because our neighbors had been forced to devalue, and we had to be competitive against them. But today, everybody thinks that the Malaysian currency has strengthened, and it should be re-valued. In fact, the Malaysian government recently decided to float the currency, to have a managed float, allow only a certain range of the exchange rate to be applied. But my view is still that the Malaysian government should fix the exchange rate. There is nothing wrong in fixing the exchange rate, provided, of course, it is a reasonable rate. And at times, there may be a necessity to change. Now, if you allow, for example, the exchange rate of the Malaysian currency today to move from 3.8 to 3.5. you would know that the Malaysian currency ahs strengthened by that amount, and because it has strengthened by that amount, its imports from other countries should also be reduced in value by that amount. For example, if you import from Japan, then the value, the cost of the imported good should go down in Malaysian currency by that amount. And that would mean Malaysians will benefit from the re-valuation, the strengthening, of the Malaysian ringgit. And in fact, they would become richer by that amount. And because they become richer, there would be a rich market for imported goods. A rich market for Japan. If you make us poor, then you lose your market, but you enrich us by whatever means, and certainly by revaluation in a proper way, you would be enriching us, then we will be a good trading partner for Japan. We will import more from Japan because we are richer by that amount.

Kojima: Thank you very much. Well, you were talking about the issues of hedge fund, and in this collection, Asian countries have tremendous foreign reserves, surpluses, and savings. and in the fast, such savings went out through the international financial systems, and part of them flow back in through hedge funds and so forth, but then it should be changed. The Asian savings should be used in Asia, so such a plan is going on, specifically the Asian bond market. And that can contain and counter the violent movement of funds through exchange rate fluctuations. So this kind of discussion is going on. Now, based on our experiences and the lessons, when we think of the common specific challenges Asian countries have, when we join forces together to cope with those challenges, then we can by and by form the Asian community of common interest, and one way, maybe just to set the framework as community as it is, but rather than that, it seems that when we think of the common important issues the Asian countries are faced with, by doing the functional collaboration among the countries, we can increase the de facto integration as a community. There could be a currency or trade and also energy securities, energy supply securities, and environmental issues. Such specific issues common to the Asian countries, and also the big and sustaining problems, we can pick those issues up and then stand up to the challenges jointly. That may be one of the approaches to form the Asian communities. May I invite Tun Dr. Mahathir's view on this?

Dr. Mahathir: Well, at the moment, the national financial regime is not working very well. Now, supposing Malaysia has a deficit in its balance of payment, it has a deficit, a government deficit, a twin deficit, people will consider Malaysia as a bankrupt country. And people will not trust Malaysian currency. Now, everybody knows today that the US has huge deficits, both in terms of government as well as in terms of trade. Yet, nothing has happened to the Americans. They are still very rich. They are still spending a lot of money. Why is this so? This is so, for two reasons. One, it is because we are still accepting the American dollar as a trading currency. And when you accept anything, then it has value. We are giving value to a currency that has no backing whatsoever. And secondly, we are keeping our reserves in American dollars, and American dollars really have got no value. It has been depreciating and depreciating against the yen and against the euro, and of course, every time it depreciates, we lose money. We keep money in American dollars, we lose money in terms of the exchange to euro or to the yen. Why are doing this? Why are we keeping a currency that has depreciated against the euro by almost fifty percent? It was 80 U.S. cents to one euro before. It has reached 132 U.S. cents to one euro at one stage. That means a 52% loss in terms of the American dollar. So a lot of people have lost money. A lot of countries which keep their reserves in U.S. dollars, including Japan, have lost money. And yet, you are still keeping money that is going to go down and down, simply because the U.S. does not care to look after its finances. It is not cutting back on its expenditure. In fact, it is spending more money because it has this burden of Iraq on its back. So, we are supporting a currency that has really no value. And because of that, the U.S. is spending huge sums of money on arms and bombs and things which are really not constructive, and not giving anybody any benefit at all. So we need to rethink the way we manage our funds. Do we buy U.S. bonds, or do you buy yen or do you buy gold? We had suggested that we should use gold as a currency. Of course, we are not going to pick gold by the tons and move them around the world. But that can be managed through certain agreements, etc. But gold has got intrinsic value. In whichever country, gold has value. But paper money has got no value at all. It is just a piece of paper or which numbers are printed, and even if you write down the numbers in an accounts book, they really mean nothing. But gold has a value, and we should go back to the gold standard, which was the original Bretton Woods agreement. But of course, a lot of people would not be very happy if we were to do that.

Now, if we have an Asian bond market, I think it is a very good thing. I would, if I were running the government now -- I'm not -- I would rather buy yen or euro at the moment, bonds issued in yen or euro, because I think the value is going to be better than the US dollar. And what is more, when the price of oil goes up, the price of oil went up in US dollars, but in yen and in euro, it did not go up very much. Now, when Malaysia tied its currency to the US dollar, and refused to revalue its currency, then of course the oil price appeared to have gone up very high. But in fact, it is truly the devaluation of the US currency. We need to study these things and to find a better way of how we manage international finance so that increases in oil prices will not affect us that much. And in any case, the oil price is going to go up. They say that by the end of this year, it should go up to 100 US dollars per barrel. This is ridiculous. What about the poor countries which have no oil at all? They would hardly be able to survive. There must be an international regime that governs the use of oil now, at the ###, because there are so many countries which are wasting oil, producing motor vehicles which consume more oil than before. During the first oil crisis, people turned to small cars, but after that, they forgot about the oil crisis, and they started building bigger and bigger cars. Today you have MPV's, SUV's, and whatever. And each one of them will carry one passenger when they are built for seven passengers. We are wasting a lot of oil, so something has to be done, internationally, through international cooperation, to regulate the use of oil and to spend a lot of money on finding substitutes for oil. Malaysia has got palm oil, and palm oil has proven to be a very good substitute for diesel oil.

Kojima: On energy, you've talked about energy. East Asia is also trying to create an environmental community, so that there will be a joint stockpile of energy, so that in market turmoil, they can use a stockpile to absorb the effects, and also encouraging joint development, and also working together to protect nature and the environment. So on the energy and environment, it has been suggested that more positive, aggressive cooperation be made amongst the Asian countries. And I think this is gaining momentum. What do you think about those collaborations?

Dr. Mahathir: I think we have no choice. We really have to cooperate with each other, cooperate, maybe a stockpile might be the answer, but we remember, of course, Malaysia remembers the American stockpile of tin and rubber. Every time the price goes up, they release the tin or the rubber, and the price comes down again. Now, for one country to carry a stockpile, of course, is not possible for fuel. But if all the countries are required to carry some stockpiled, and to draw on the stockpile whenever the prices jump up too high, I think it will have an effect of at least slowing down the increase in the oil prices. But there must be also cooperation in how to conserve the use of fossil fuels, and here we need to do a lot of research. Today we are using more hybrid cars, and I think the answer to the future will be hybrid cars. Electric cars are fine, but to generate electricity you still may need fossil fuel. We should, of course, care about the environment. But where it is necessary to produce hydro power, we should not encourage people to obstruct the construction of hydro power in Asian countries. Actually, Asia has not exploited its full potential of hydro power. But if you look at the Scandinavian countries or Canada, or America, they have fully -- not fully -- but they have exploited their hydro power much more than we have. And yet, when we try to exploit hydro power, there is such a big protest and these countries which have already exploited their hydroelectric power, are encouraging our people to go against construction of hydroelectric power plants. I believe that the Three Gorges project in China will help reduce the use of fossil fuel a great deal in China. And China is going to be a very big consumer of energy, and unless China is allowed to build more hydroelectric projects, its consumption of fossil fuel would force the price of petroleum to go up, and this would be very bad fro the very poor countries which have no oil.

Kojima: Thank you very much.

Titles of speakers, names of companies, etc., were correct as of the time when the forum was held.