Former deputy prime minister Anwar Ibrahim has revealed the key players who went behind the back of the then Bank Negara governor - the late Jaffar Hussein (right) - to make foreign exchange (forex) speculations resulting in losses of up to RM30 billion between 1992 and 1994.

Describing the entire episode as his "worst experience" in government, Anwar claimed that former premier Dr Mahathir Mohamad was in cahoots with former finance minister Daim Zainuddin and Second Finance Minister Nor Mohamed Yakcop to cause the losses which have not been recovered by Bank Negara until today.

"It was Nor Mohamad and Mahathir and Daim. That was the time I just came in (as finance minister). But I trusted Jaffar who did not know about it until I asked. He genuinely thought that it was a small amount," he said in a two-hour interview last week at malaysiakini's office in Bangsar Utama.

"By the time I got the picture, the problem was huge. We were talking about losses in the range close to US$10 billion."

He claimed that he had no inkling of the forex speculations until he went overseas where friends confronted him over the fact that Bank Negara was among the top three players and was widely considered a rogue bank.

"I knew from a Switzerland friend who told me: 'Look Anwar, Bank Negara's ringgit speculation was huge'. I told him that couldn't be as we needed to protect our reserves. But he told me that you (Bank Negara) were one of the top three. One of the top! I said (it was) impossible that we could be among (the countries) which have billion of dollars to speculate on forex."

He said when the then business editor of the Far Eastern Economic Review also confronted him over the issue later, he decided to seek clarification from Jaffar, who was similarly in the dark.

Anwar said there were initial attempts to get answers from Mahathir, who instead downplayed the problem and accused the western media of trying to undermine Malaysia.

Anwar also said that Nor Mohamed, then a Bank Negara assistant governor who was the point man in the forex speculation, could have been charged in court had he not been forced to step down. But this also resulted in the dismissal of Jaffar, who also had to take responsibility for the losses.

Anwar also lamented Mahathir's decision to bring Nor Mohamed back as economic adviser four years later.

"You are talking about a person who cost the country, 10, 15, 20 billion ringgit of real losses and yet you (Abdullah) promoted him as (second) finance minister."

Anwar said he did not relish having to go to Parliament then to explain the losses and come under intense fire from the opposition.

Opposition leader Lim Kit Siang of DAP had recently reiterated his complaint made in Parliament more than 12 years ago on the government's failure to come clean on the colossal losses.

The issue of Bank Negara's forex losses re-emerged recently after Umno-linked tycoon Tajudin Ramli made a number of allegations in a counter law suit.

Following this, Lim called for a royal commission of inquiry to reveal the culprits who had caused the losses.

Regrets, I have a few

Meanwhile, Anwar also expressed his regrets for failing to bring reforms when he was in government.

He said he was in the midst of tabling a new Education Act which would have seen the repeal of the Universities and University Colleges Act and given more protection for vernacular schools when he was transferred to the Finance Ministry.

According to him, his efforts only went as far as circulating the draft bill, which was later neglected by his successors in the Education Ministry.

He also regretted not putting his foot down to object the construction of the Kuala Lumpur International Airport in Sepang and the Bakun dam in Sarawak

"Some said that I should have been more firm but I wasn't. But if I had done that, I would have been sacked in 1993," said Anwar, who is now the opposition Parti Keadilan Rakyat adviser.

Asked to comment on International Trade and Industry Minister Rafidah Aziz's statement that Malaysia was still an attractive destination for foreign investors, Anwar accused her of being in "a state of denial".

He also dismissed the minister's claim of the country's RM6.08 billion foreign direct investments during the first six months of 2006 as "government propaganda".

"So a company comes in with RM10 billion, they start in 2007 and end in 2020. When can we apply this amount (to the statistics)? It should be distributed evenly over those years but instead you (the government) put the entire figure immediately in the statistics.

"That is why when you ask if I regretted joining the government, I said 'no' because I learnt the tricks of the trade. You can't fool (me) with figures anymore."

In the interview, Anwar also spelled out at length some of the economic reforms the country must undertake in order to regain its competitiveness, which included the dismantling of the 35-year-old New Economic Policy.

Tomorrow: My future in the opposition

Part 1
Anwar: A plot to bring back Dr M
Q&A: Najib too 'guarded and calculative'