On Aug. 17, Prime Minister Mahathir Mohamad ceremoniously pounded a cup-shaped rebana drum to inaugurate the Petronas Philharmonic Hall in the world's tallest office complex. At the same time, the city was being festooned with lights and banners welcoming athletes and spectators to a month of festivities in conjunction with the 1998 Commonwealth Games. The combination was to be Malaysia's coming-out party on the order of Tokyo's Olympics in 1964 or Seoul's in 1988. But instead of flinging open its doors to a suitably impressed world, Kuala Lumpur is welcoming visitors to a city where the most lucrative business may be inventory liquidation.
Statistics punctuate the story.
There is much more. And while the devaluation would normally be expected to help exports by making Malaysian products more competitive, it has not happened that way. Exports are down both in U.S.-dollar value and volume. The troubles recently prompted Moody's Investors Services to downgrade the nation's sovereign debt credit rating three places to within whispering distance of junk status. She has particularly noticed price increases for imported goods like the peanut butter favored by her children.