CAPITALIST SYSTEM HAS FAILED, SAYS M'SIAN MINISTER

KUALA LUMPUR, Jan 8 (Bernama) -- The Anglo-Saxon capitalist system driven by
the Western countries has failed, causing chaos in the global economy as it is
based on greed, Second Finance Minister Nor Mohamed Yakcop said Wednesday.

He said the system which encouraged speculations also saw the creation of
many complex funds and financial products that resulted in multiple loans being
given out.

"If the Islamic banking system had made an impact earlier, then it may have
been possible to avoid the economic disorder as the system will not bring such
problems," he said in the Dialog@1 programme over national broadcasting station,
TV1.

According to Nor Mohamed, the capitalist system was already beginning to
deteriorate since the 1980s as too much freedom was given to the private sector
and governments not having a direct role in the economy.

He said the capitalist system, championed by the United States and the
United Kingdom, has been followed by other developed countries.

"The system places too much faith on the private sector with governments not
interfering. We have seen many speculations occurring in the system since the
1997/1998 period in which the prices of commodities rose very high and crude oil
prices touched a new record of US$140 per barrel compared to US$80 previously,"
Nor Mohamed said.

"This was due to the speculations arising from greed could not be curbed,"
he said.

As a result, confidence towards the economy was affected, causing leading
banks to not only stop providing loans to customers but also other banks, the
minister said.

"This caused a disruption in the US credit system," he said.

Malaysia, being an exporter to the major developed countries, will also feel
the impact of the economic problems in these countries, Nor Mohamed said.

"With this, I expect 2009 to be challenging year for all of us," he said.
-- BERNAMA