PRIME Minister Dr Mahathir Mohamad has defended his handling of the 1998 Asian financial crisis, which saw tycoons and big businesses being bailed out.

The crisis occurred near the end of his fourth term as prime minister. Dr Mahathir was prime minister for six consecutive terms from 1981 to 2003 before returning to power last year.

He justified the strategy as a way of reducing job losses, and maintaining exports and taxes from these big corporations.    

“Yes our method of dealing with the crisis was to help Malaysian tycoons. Of course it is good if we don’t help them and let their businesses make losses, fail and shut down,” Dr Mahathir wrote in his blog chedet.cc. 

“With this, all their staff (both rich and not rich) will be jobless. Exports will go down and there will be no money coming into Malaysia. 

“The government will also lose a source of corporate income tax as a big chunk of it is paid by these tycoons. 

“The government will lose revenue. Development and operational spending for the country can no longer continue. No new infrastructure can be built.” 

If the government had lost a source of revenue from these tycoons, it would have to start levying more taxes on ordinary folk and this would have caused them to become poor, the prime minister wrote.  

About 70 years ago, several countries had taken over the companies and the wealth of their local tycoons with the hope that these riches could then flow to the government. 

Dr Mahathir said Malaysia could have gone down the same path and driven some tycoons from its shores while helping only those who were not big-business owners. 

“But how would we help these non-tycoons after all the tycoons don’t pay taxes (since they’ve been driven off). That is the question.

“So I’m sorry if my method of dealing with the 1997-98 financial crisis had benefited tycoons,” Dr Mahathir said.