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Fear and Loathing on the Currency Trail Signals New Challenges for Management 16th July 1997
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As the ancient Buddhist scripts tell us, life is cyclical. And Thailand
being the first of the modern South East Asian economies to experience record
growth 10 years ago, it has been the first, also, to break its bubble. The
effective devaluation of the Baht earlier this month has already seen the
Baht devalue 20% on the US dollar with limited effect on a now long endured
sluggish stock market. The Phillipine Peso, followed in sympathy 1 week
later, with strong pressure on the Indonesian Rupea and a strong attack
on the Malaysian Ringitt repulsed on Monday. At the same time, stock markets
have not responded as well, at least in the short term, as the economic
managers would have liked, and it is reinforced to the few remaining disbelievers
among us that the 10 years of feast are about to be replaced with the 10
years of, if not famine, at least less heady times than the previous decade.
But despite the prophecies of gloom and doom merchants, many may breath a sigh of relief as we exit from a decade of unsustainable growth, which may well have lined the pockets of our upper and middle classes but also resulted in immense strains on our urban, government, social and management infrastructures. As unprecedented development funds flowed into our economies, management & executive salaries skyrocketed, regardless of competence or skills. Perhaps, now is the dawn of a decade of consolidation as reducing growth undermines the influence of the greedy and profiteering, and allows us the time to develop our management skills, and real social responsibility to our communities. A wiser and more mature South East Asia, much better placed for the challenges of the Asia-Pacific Century may well be the result.
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