In a Global Times interview today, Mahathir Mohamad, the former Prime Minister of Malaysia who did the “impossible” in the 1997-98 “Asia Crisis"—using capital controls and deploying a stable currency in the midst of currency collapses all around him—spoke about a new non-dollar reserve currency for Asia, while also discussing the crisis brought on by NATO’s war. He recurred back to his proposal during that “Asia Crisis” so-called, and to the need to balance trade for Asia with a reserve currency.
“Long ago I suggested trading currency to be used only for trade in the ASEAN region, as well as the Northeast Asian countries,” said Mahathir. “That means Japan, South Korea, and China….
“The feeling in the world today is changing. Before, they accepted the Bretton Woods Agreement, which says that trade should be conducted in the U.S. currency; now many countries want to use other currencies. My suggestion that we should have a currency for trading in East Asia is now something that is acceptable to many countries.
“Whenever you have that, then you can value your exports against your imports. If imports are bigger than your exports, then only you pay. If not, you don’t pay. In a way, it is a kind of better trading that you do not exchange goods, but you exchange the value of the goods that you trade with. For example, if Malaysia sells more to China, in the following year China will have to increase its exports to Malaysia in order to balance the trade. Otherwise, China will have to pay Malaysia the difference within Malaysia’s exports. The difference will be in a special trading currency.” (https://www.globaltimes.cn/page/202305/1290284.shtml)
