Nation Channel's Veenarat Laohapakakul held an exclusive interview with former Malaysian prime minister Mahathir Mohammed, one of Asia's most outstanding and controversial leaders in modern history. Here are excerpts from the interview, aired last night on Channel 9.

Q: Are you happy with the way Malaysia is run right now by Prime Minister Najib Rasak?

A: Well, I think it's okay.

Q: But it's heading in the right direction?

A: Yes, it is.

Q: In the 70s and 80s Southeast Asian countries began to manufacture a lot, export a lot, but now we tend to look to tourism, to education. Looking to the future, what will be the new areas that Southeast Asia should look to in order to earn foreign income?

A: Most East Asian countries depend upon export earnings. They manufacture for export, but now we find that markets have shrunk because of the crisis. So we need to see how much our countries can depend on each other, develop each others' economies so we don't have to depend that much on markets outside East Asia.

Q: For Asean, do you think we are going in the right direction, now that we have the Asean charter?

A: Yes, we are but the speed is very slow. We need to come together much more. It's about cooperating, because Asean has to contest with other regions like Europe, and with the idea of free trade. If one country tries to defend itself, it's not strong enough, but if Asean as a group takes up an issue then people will listen to us. Of course Asean can also work with Northeast Asian countries like China, Korea, Japan and so become stronger in protecting our interests.

Q: What is the biggest threat to Asean as a regional bloc?

A: We are not as strong economically as developed countries. If we open up our market to them, they can take advantage of us, but we can't take advantage of them because we don't have the technology, we don't have the capital, and we cannot be active in their countries the way they are active in ours.

Q: Do you think Asean is a dysfunctional family? We have this non-intervention policy, so even though we always talk about family spirit, we don't talk about each others' domestic affairs. We have a lady in Burma under house arrest surrouded by men with guns, but other members just let it be.

A: Yes, we have a problem like that but the question is, how do you tackle the problem? The Western idea is that you punish these people, apply sanctions, make them poor, make them suffer so they will come begging. That is not the Asian way. Asians don't tell people what they should do in their own house. Sanctions punish the people, not the leaders. We should not apply pressure, we should try to persuade.

Q: Do you think Southeast Asian countries need economic prosperity for stability more than civil liberties?

A: Well, I think it's fun to have civil liberties and be poor. You're free, but what does it get you? If a country is to develop, there must be some restrictions, because one's man freedom can mean another man's lost freedom. We have to think about the majority of the people. If we have a demonstration in a town, people who are doing business in the town cannot earn money, and some of them are very poor, so it's not fair to them.

Q: Do you think authoritarian government, suppressing the press or stamping out the opposition is still the way to go in the 21st century?

A: No. there's limit to everything, a limit even to freedom. If you have a press that constantly creates (problems) between people then we shouldn't call that freedom of the press. It's like when you have freedom, you can't go around and punch other people. There are certain things you cannot do. We have to look at the welfare of the people. If anybody exercises freedom in a way that damages other people, then we should say stop.

Q: What do you think of President Barack Obama?

A: Well, Barack Obama made lots of promises but so far he hasn't done anything.

Q: Do you think the US has less influence in the world today?

A: Yes, it has lost a lot of influence because of itself. It abuses the banking system, the monetary system and has created a crisis in the rest of the world.

Q: Do you think the balance of power has shifted from West to East, with China leading the way?

A: Not completely, but I think it is going in that direction. There's a need for us to sit down and consider the international financial system, the monetary system, the banking system. All these things have been abused.

Q: A lot of people look at how you spoke up against the West. Do you think Asia needs someone like that today?

A: Well, especially if they stand together. We were very much alone, we were frightened to stand up against the world but were reasonably sure that what we did was right and would help us, so we took a stand by supporting Asean to stand together with us. Then we were much more comfortable.

Q: Looking back to your proudest achievements. We are sitting now on the 86th floor of the Petronas Towers. Is this one of them?

A: In Malaysia we have three different races living together. They are divided by language, religion, culture and even wealth. So the ingredients for constant clashes, even civil war, are there. I am very happy that I inherited a stable country and I was able to keep it stable during my term of office. This is something I'm proud of because when I became prime minister I was known as a Malay extremist, but when I stepped down, those who called me extremist became my strong suporters.