ISLAMIC BANKING CAN BE SOLUTION TO GLOBAL FINANCIAL WOES, SAYS DR MAHATHIR

KUALA LUMPUR, Nov 20 (Bernama) -- Islamic banking should not be dismissed
as a potential solution for the ongoing global financial crisis, former Prime
Minister Dr Mahathir Mohamed said Thursday.

He said those who had put in place the current financial system used were
in denial and did not want to admit that the system they have been using all
these while were wrong and open to abuse.

"They try to patch up here and there with bailouts. But that is not going
to solve anything," Dr Mahathir told reporters at the Fourth International
Convention on Takaful and Retakaful here.

"So in the process of trying to solve the problem, don't dismiss any idea
including Islamic banking. Maybe not the whole Islamic banking, but elements of
it can contribute towards stabilising the banking system of the world," he said.

Asked if he thought that if bodies like United Nations are seeing a need
for change by setting up a high-level task force to examine possible reforms of
the global financial system, Dr Mahathir said: "There is a political element
there."

Earlier in his keynote address, he said two Malaysians were picked to join
the high-level task force, with one of them being the Central Bank governor and
another a critic of the government.

"They pick a person whom is against the government. If they want to do
something, they already have an agenda," Dr Mahathir

"They must find a person who is against the government they don't like and
he is the one who is going to advise them. And he is going to be wrong because
he has never done anything positive... he's merely a critic and to be a critic
is very easy," he said.

Central Bank of Malaysia governor Dr Zeti Akhtar Aziz and Malaysian
economist Jomo Kwame Sundaram have been appointed members of the UN's Commission
of Experts on Reforms of the International Monetary and Financial
System.

Asked if he thought the RM7 billion (US$1=RM3.62) stimulus package
announced by the government was enough to stimulate economic growth during these
trying times, Dr Mahahtir said "It may contribute to something, but it is like
a patchwork kind of treatment."

"You have a headache because you are sick, and you just treat the headache.
That is not good enough. You have to treat the whole body," he said.

"So this RM7 billion Panadol given may solve the headache, but there are
other parts of the body that are going to be very sick."

Asked about his thought of the current domestic economic situation and if
it could withstand the global recession, Dr Mahathir said Malaysia as a trading
nation would be affected.

"To say that we can withstand the effects of this terrible recession is
wrong. There must be an impact because we are a trading nation," he
said.

"We have to sit down and think what has gone wrong with the rest of the
world and how does it affect us. We exist by selling things to 200 different
countries. That's how we built our economy, in trade. If our trading partners
are not doing well, we cannot very well do well," he added.

-- BERNAMA