RIYADH: Mahathir Mohamad, former prime minister of Malaysia, called on the nations, rich and poor across the board, to sit together and map out future strategy to deal with the global financial downturn caused by the “systemic failure.”

He stressed the need to improve the functioning of the international monetary system and start a process of systemic rebuilding, saying that “US President Barack Obama will not solve the problem alone.”

The call to initiate a process of rebuilding the global financial system, which has not yet started, was made by Mahathir, the longest serving prime minister of Malaysia, while addressing the concluding session of the three-day Global Competitiveness Forum, organized by the Saudi Arabian General Investment Authority (SAGIA), here. In his 50-minute speech, the premier mainly touched on issues confronting the global economy with special reference to Malaysian experience.

Mahathir also spoke about the similarities between Saudi Arabia and Malaysia, saying that “a sentimental bond draws both countries together.”

More than 1,000 guests including top Saudi officials, decision makers, planners and chief executives of the companies attended the session addressed by Mahathir.

He said that the recent credit crisis seems to confirm the fears of some scholars that the globalization of financial markets may present important challenges that need to be addressed. He said the world was not aware of the dangers of systemic risk or systemic crisis in financial markets, which is more evident in the case of Western nations where supervision of the financial market is minimal.

“This is contrary to the Eastern countries, where you have greater supervision,” said Mahathir.

He said that Malaysia has looked toward the East in an effort to use its good practices that have helped to boost its economy.

He pointed out that the doctrine of his governance is, which is the slogan in Malaysia, is “prosper thy neighbor”. “If the neighbor is prosperous, there will be less problems across the border and the problems of the neighboring nations will not spill over to,” said Mahathir, who is an acclaimed statesman. He said that the attempts were made to overlook the problems and patch them up, which later surfaced alarming proportions.

He referred to the Enron and AIG failures in the US to substantiate his point. He, however, admitted that Malaysia is also feeling the adverse impact of the global recession mainly because of the fact that it has been traditionally a trading nation. “We have been exporting $100 billion worth of goods and services annually,” said Mahathir, while referring to the sharp decline in Malaysian exports.

On the increased role of women in building nations, he said that, “no country can afford to allow half of its population to sit idle doing nothing ... we found out in Malaysia that our women were more productive than men in some cases.”

Referring to the growing corruption in certain countries, which has impeded the progress, Mahathir said that, “corruption is the single most important obstruction to a nation’s development.” He said corruption was a social disease found all over the world. “And corruption is among the most difficult crimes to detect and even more difficult to gain conviction in courts of law,” said Mahathir, while admitting that there is corruption in his country also. “There was still some corruption in Malaysia, but not to the extent that the development of the country could not take place or be grossly delayed,” said Mahathir.

Referring to the Malaysian experience in becoming a competitive world player, he said that Malaysia was an agricultural economy with $350 per capita income in 1957.

“But, we managed to emulate Eastern nations especially Japan and Korea, controlled social unrest and promote labor-intensive industries; which eventually resulted into a great prosperous Malaysian nation today”, he said.