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Some blunt truths I think from the former prime minister of Malaysia.

All very true I think. We're still in a state of denial about our finances and still trying to live beyond our means.

As he says: "Europe... has lost a lot of money and therefore you must be poor now.......And in Asia we live within our means. So when we are poor, we live as poor people...... you cannot expect to live at this level of wealth when you are not producing anything that is marketable"

What do others think? Personally I'd like to make him our PM!

Yes, I think he's on to something. And it will be painful.

Tell that to the Eurocrats.

Wise words from sir

Don't know about Malaysia but a few asian countries wouldn't quite fit with the assertion that 'we live as poor people'.... Quite a lot of the population may be in abject poverty or dying of starvation etc but there's always a privileged set being flash with the cash.

He's right, but the Europeans (Brits included) don't want to hear that.

Europe ISN'T poor. It has POOR wealth distribution. The rich are getting richer, the poor are getting poorer. And the gap between them is getting greater, because as Cogito says, there is a privilidged 'elite' that love to flash the cash (and rake it in).

I think Cogito meant the privileged set were in Asia but I guess the same is also true in Europe. Except I'd argue the gap between rich & poor is less in Europe than it is in Asia.

And the fundamental point he makes is that our economies are not creating wealth. Manufacturing is the only way to create wealth and that's almost all done now in Asia.

The other point he makes is that we need to live within our means. What we've been doing is fooling ourselves into thinking we're doing well by borrowing money to make up the shortfall between what we can afford and what we want to afford.

Some people only want to be able to afford to pay their rent, utilities and eat...

I think he's right in that fundamentally we are not producing or making anything anymore. So we aren't the cheapest when it comes to manufacturing but we aren't the 'cleverest' either in terms of ideas, services etc. Then when we have a great 'export' eg higher education, the gov decides to clamp down on all these foreigners who can and want to pay at least £10k fees/year plus another £10k living expenses.

Having said that, our structures are different - high taxes, 'free health care' which don't exist over there. Taxes are high only for the very rich .5% or something, and people pay for healthcare. Families traditionally look after each other through old age and sickness so less of a reliance on the gov providing everything. with less tax and greater savings and family support, things do look different there compared to here.

No problem with someone suggesting that us Europeans have to live within our means but still think there is a certain hypocrisy in an Asian leader claiming that their entire society 'lives as poor people' when it's clearly not as equitable as that. 'Poor' in an Asian context often means 'starving and dying' and we are still giving overseas aid to places like India to save lives simply because they can't (or won't) redistribute some of the wealth from the booming parts of their economy to their poorest. Even the most austere of austerity measures should not condemn anyone in Europe to die of starvation.

Cognito - he's not saying that they are all poor he's basically saying that in asia poor people (not the rich and there are many in asia) live as poor people and our poor don't. We in europe have a far higher sense of entitlement as we have a far higher state help. I think he's taking a bit of a pop as europe as a fading power.

I think he makes a good point. My income has plummetted and I find it hard to cost cut (but I do it and I'm fine) as I think back to my previous disposable income and generally what's out there to have.

Cogito - that fails to take into account those who will fall through the ever-widening gap in the Welfare system, who have been forced to rely on food banks to eat even a basic diet, and have ended up comitting suicide because they couldn't live like that any more. There HAS been reported cases of this, in the UK, in the last year alone.

I myself face falling through a gap in the welfare system in 4 years time - too sick to qualify for benefits for people seeking employment, too well to claim disability benefits, therefore no income at all, facing homelessness and reliance on food banks for food.

TBH I'm burying my head in the sand about it metaphorically - it's just too scary to face the truth of my own situation.

No, he's an idiot. That's NOT how national economies work.

Really Don? How does it work then? Cos frankly the Asian economies are now kicking our butts.

CES is right, it is a bit much for a person to be talking about what 'we' do when 'we' are poor, given that he clearly isn't including himself in this category.

He has a point. If this country was an individual instead of a country, friends and family would be rallying round to tell that individual to stop being so stupid.

What individual would be in the amount of debt that this country is in and then do the equivalent of

1) pay for all his mates to go on holiday and treat them to a show at the same time (the Olympics)

2) throw his Mum a massive party where everyone they have ever met was invited, as well as giving her loads of expensive presents (the jubilee)

3) build a great big extension for keeping cars in and a few cars to keep in it (the new rail links)

4) hand over money to friends so that they can buy their children stuff (Foreign Aid)

Fwiw, I'm glad we are doing those things, but it does seem to ring true that we are living as if we have more money than debt.

Must admit I probably wouldn't be taking lessons from a Malaysian leader!

"Personally I'd like to make him our PM!"
You should be more careful about what you wish.

Mahatir's comment has some truth in it, but he's not saying anything new. The country he "built" is crumbling from social division, mostly racially in his time but now the fruits of corruption are not quite enough to go round, so a lot of effort is going into steming the equivalent of an Arab Spring in Malaysia.

If you wish to learn some economic lessons, you'd be better off trying Singapore, where not only has the government steered a full recovery from the recession but has started giving serious money back to the old (as recognition of their contribution to the current generations), the young (for their future) and the general taxpayer, from its unprivatised companies. Try googling what their last budget was, and drool. They take migrants based on contribution, not colour, but only because their citizens are not that great at keeping up sustainable birth rates. Their civil rights record is no worse than the UK's, and needless to say infinitely better than Malaysia's.

Quite, thirdhill. Malaysia is a divided and unstable country. It wouldn't surprise me to see some sort of uprising or military coup there in the foreseeable future. Singapore, like the UK, isn't perfect but there does seem to be a greater understanding of the shades of grey that come together to make a genuinely successful economy, and having large swathes of your country living in near 3rd world poverty ('living within their means?') whilst the 'elite' and their cronies live lives of unearned luxury is hardly a model to follow.