It has been a long time since any national leader outside the Middle East has resorted to old-fashioned anti-Semitic smears and Jewish conspiracy theories. The charitable may contend that the collapse in the Malaysian ringgit momentarily clouded Dr Mahathir’s judgement. It would be more accurate to say the pressure of the currency crisis simply revealed yet again Dr Mahathir’s long held anti-Semitic prejudice.

Those with a knowledge of Mahathir’s track record would have sensed an anti-Semitic smear was not far away when he began his attack on foreign currency traders and Mr George Soros in particular, calling the prominent US financier "a moron" and "criminal" (Soros, a Jewish survivor of the Nazi occupation of Hungary, spends more than half a billion dollars annually promoting open, Western-style societies in such countries as Russia, Yugoslavia and Burma).

Sure enough, Dr Mahathir revealed his underlying views to a crowd of supporters in the predominantly Muslim province of Terengganu. Noting that Mr Soros is Jewish, Mahathir observed that "incidentally, we are Muslims, and the Jews are not happy to see Muslims progress." Casting Jews as thieves, Dr Mahathir said "the Jews robbed the Palestinians of everything, but in Malaysia they could not do so, hence they do this - depress the ringgit." He went on to say "we suspect they, the Jews, have an agenda, but we do not want to accuse," clearly inviting the audience to draw only one conclusion.

Once Dr Mahathir’s remarks were duly reported by the state-run Bernama news agency and gained international attention, he was forced to explain. Claiming that he did not accuse Jews of undermining Malaysia’s economy, Mahathir said "I merely stated that this person (George Soros) is Jewish." It’s not surprising that he felt he had been misreported - "we cannot make such wild accusations... they [the Jews] will twist our arms."

Indeed, Dr Mahathir has long asserted that the Western media is controlled by Jews. In a 1993 speech to the UN General Assembly, he stated that "a very few people in the West control all the international media... presidents can be made or broken by them." Only this year in Kuala Lumpur he complained that "the international media, which is controlled by the West and the Jews, is always projecting a bad image of Malaysia."

Of course, this is the same Dr Mahathir for whom racist and anti-Semitic theories have been a persistent theme over more than 30 years of public life. This is also the man that authorised the Malaysian Censorship Board to ban the showing of Steven Spielberg’s film Schindler’s List in 1994 (it allegedly had "the purpose of asking for sympathy for one race [Jews], as well as to tarnish another race [Germans]"); the same man who in 1986 told an international conference the Jews had become "monsters" and "apt pupils of Dr Goebbels;" and the same man that had his government cancel a 1984 visit to Malaysia by the New York Philharmonic Orchestra because of its intended performance of a work by a Jewish composer (government policy prohibited the "screening, portrayal or musical presentation of works of Jewish origin").

In fact, the clearest enunciation of the views that Dr Mahathir has maintained over the years lies in his 1969 book The Malay Dilemma, which set out his program for the Malay people. In a lengthy exposition on the differences between the races - most notably the Chinese and the Malays - Mahathir referred also to the Jews (although virtually no Jews live in Malaysia) as being "not merely hook-nosed, but they understand money instinctively". He further noted that their "stinginess and financial wizardry gained them commercial control of Europe" and thereby provoked anti-Semitism.

Dr Mahathir’s comments have caused considerable embarrassment, both within Malaysia and particularly among its neighbours. Most outspoken was Thailand’s English-language daily Nation, which panned Mahathir as "racist" and having "outlived his usefulness", calling upon him to resign (In Thailand, where the Asian currency falls started, there has been no resort to blaming the Jews or ‘the West’). Other ASEAN partners, such as Singapore and Indonesia, distanced themselves from Mahathir’s outburst at a recent ministerial meeting - "They were having none of this conspiracy theory, anti-Jewish nonsense," an insider confided.

In stark contrast to US officials, who roundly condemned Mahathir’s "outrageous nonsense", Australia’s Foreign Minister Alexander Downer was less forthcoming. Asked repeatedly in Tokyo to repudiate the comments, he said: "I do not want to get into that. I have been asked that several times." The signing in Kuala Lumpur of a Bilateral Trade and Economic Cooperation Agreement between Australia and Malaysia the following week may have had something to do with it.

Prime Minister Howard could not bring himself to explictly rebuke Mahathir by name either. However, he did point out that he had made it clear in his London meeting with the Malaysian leader that his remarks had caused concern in Australia, and he repeated his statement of the previous week, "utterly repudiating anything that involves any suggestion of anti-Semitism".

While Indonesia and the Philippines are now receiving advice from the IMF and World Bank to stabilise their economies, Dr Mahathir’s latest idea is to build in rural Malaysia replicas of villages in the English Cotswolds, which so charmed him last July, as a tourism and farming venture. He also continues to mutter darkly about currency traders. His apparent reluctance to address the real issues (and readiness to blame outsiders) has invited a further loss of international confidence, at great cost to his country, and further sullied his credentials. Anything but an outright and explicit condemnation of Mahathir’s appalling remarks sells us short.