Daim rebuffs foreign critics
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Daim rebuffs foreign critics

He has been brought back to save Malaysia, just as he did in the mid-1980s when he dragged the country out of recession. Can he do it again? Tun Daim Zainuddin spoke to Steven Irvine about transparency, empty monorails and the problems with Malaysia's financial system.

Don't underestimate Tun Daim Zainuddin, diminutive in stature, wearer of golden silky shirts, especially when he tells you he's just a simple man longing to retire. He's probably the most important figure in Malaysia's post-independence economic history. Nothing happens in corporate Kuala Lumpur without Daim's knowledge - and usually his say-so. A successful businessman in his own right, a former finance minister (1984-91) and treasurer of the ruling party, Umno, he's also Mahathir's closest confidant. The 59-year-old is now back at the centre of government as executive director of the newly created National Economic Action Council.

A lot of foreign bankers think overlending to Malaysia's tycoons could cause a worrying rise in non-performing loans.

We feel that prudent measures addressing this matter have been put in place since 1982. Based on these measures, banking institutions are not allowed to have exposure to a single borrower in excess of certain prudential limits.

Will foreigners be allowed to buy controlling interests in Malaysian banks, or is this viewed as a possibility only in extremis?

Foreign participation in the Malaysian banking system is already relatively high. It accounts for over 30% in terms of deposits, total loans and paid-up capital and over 40% in terms of pre-tax profit.

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