The decline can be blamed in part on a regionwide stock slump, though the Sept. 1 end to restrictions is clearly a factor. The government has tried to counter the expected outflow by making it easier for Malaysians to borrow from banks so they can invest in stocks. But Sept. 1 is just another date. Others think there could be some damage to Malaysia's international reputation. As Malaysia has recovered over the past year, the critics have been silenced.
Foreign reserves are way up and exports are recovering.
We always knew the International Monetary Fund couldn't teach us a thing. Indeed, we have taught them a few lessons. In hindsight, many argue that they came at precisely the wrong time - when Asia was poised to begin its recovery. Consequently, Malaysia locked out the world just as global money was set to come knocking. Ostensibly, the controls were meant to keep foreign currency speculators from passing judgment on Kuala Lumpur's recession-fighting moves.