Malaysia's experience in tackling the destabilising effect of the economic crisis gives
                       the best story when compared to its similarly affected neighbours.

                       This was the assessment given by a former US trade official, whom US-based magazine National
                       Journal credited as "when Clyde Prestowitz talks about trade, the White House listens".

                       Clyde V. Prestowitz Jr is the founder and president of Washington D.C.-based Economic
                       Strategy Institute, a non-profit research organisation specialising in issues of globalisation and
                       competitiveness.

                       Prestowitz said despite the bad Press Malaysia got as a result of Prime Minister Datuk Seri Dr
                       Mahathir Mohamad's critical comments about hedge fund speculators and currency traders,
                       "Malaysia is the best story in the region."

                       Moreover, after the initial criticism of its policies, Malaysia had seen the International Monetary
                       Fund and World Bank subsequently adopting much of the country's thinking, in particular the use
                       of capital controls in certain circumstances.

                       "Malaysia's economy was in relatively good shape prior to the crisis, and it has driven ahead with
                       restructuring and reform more quickly and thoroughly than its neigbours."

                       Prestowitz noted that in the process, two organisations, Danamodal Nasional Bhd and
                       Pengurusan Danaharta Nasional Bhd, had been created to recapitalise banks, take over bad
                       loans and restructure them.

                       "Much of this work has already been done. That Malaysia had an effective legal system before
                       the crisis has greatly facilitated its subsequent handling.

                       "Bankruptcy and other legal proceedings are not issues here as they have been in Thailand and
                       Korea."

                       The assessment was contained in a "State of Asia" economic report compiled by Prestowitz after
                       a visit to Kuala Lumpur in July. Copies of the report have been sent by the institute to key
                       business and government leaders in the United States including the White House and Treasury.

                       A copy of the report accompanied by a letter from Prestowitz was sent to First Finance Minister
                       Tun Daim Zainuddin, who met Prestowitz during his visit.

                       In the report, Prestowitz also acknowledged that as in all countries of the region, the Malaysian
                       Government was engaging in significant deficit spending and keeping interest rates low to provide
                       stimulus to the economy.

                       "These policies, of course, will eventually hit their limits but this is not all that Malaysia is doing.

                       "Much thought had also been given to questions of optimal resource allocation and target industry
                       programmes like those for the auto and steel industries are being re-evaluated."

                       He noted that strong efforts were being made to encourage small and medium sized enterprises
                       while pressure was being put on the banks to lend again now that they had been rescued.

                       There was also great emphasis on development of technology-based businesses, education for
                       high tech era, and making the shift from labour intensive to knowledge intensive businesses.

                       "In short, Malaysia is not asleep in the way that some others in Asia seem to be."

                       On the "much-maligned" selective capital controls, Prestowitz said the controls seemed to be
                       "working pretty well and in any case were doing no demonstrable harm.

                       "Consisting of a (levy) that declines over time on inward portfolio investment, they do not affect
                       direct investment which continues to rise."

                       In fact, Prestowitz pointed out that several analysts noted that the capital controls had made
                       Malaysia more attractive for foreign direct investments because they eliminated currency
                       fluctuations.

                       "Interestingly, they also do not seem to be much of an inhibition to foreign portfolio investments,
                       which has come back to support and push share prices on the Kuala Lumpur Stock Exchange up
                       by more than 200 per cent this year."

                       In conclusion, Prestowitz said Malaysia's real economy "is rebounding nicely and should record
                       four to six per cent growth this year."

                       His forecast was based on the heavy deficit spending and easy money policies and strong growth
                       in exports on electronic goods, textiles, oil and agricultural products.