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Stock markets and currencies on the way up as "uncommon sense" prevails 9th September 1997
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The first good news for many weeks this week as Stock Markets and currencies
in South East Asia not only slowed their downward roller coast ride, but
started to show gains throughout. It may be a temporary respite, but it
reverses a trend of several weeks that seemed to be out of control.
Fast on the heels of the mainstream press rather belatedly picking up on the Rat's own concerns on the tendency for Asian leaders to blame rather than react positively, (see commentary from the Los Angeles Times, Business Week, and the Sydney Morning Herald), Datuk Seri Dr Mahathir Mohommad, crotchety leader of one of the economies worst affected, pulled off a master stroke by slowing several high profile Malaysian mega-projects and reversing his stance on short selling. Perhaps not so co-incidentally, the reversal of South East Asian currency and stock market fortunes followed almost immediately. In neighbouring Thailand, Nero General Chevalit finally succumbed to enormous public pressure to support the new draft constitution, in the face of opposition from several of his cronies, who had a lot to lose from increasing transparancy and accountability in Thai politics. The result? ..after 2 months of devaluation, the Baht actually gained on the US dollar. And that is only two examples, among several others, of leadership in the region moving from a state of shock to a state of constructive adaptation. Rather than the events of the last two months being a "blimp" on the road to the Asia-Pacific century, they are a necessary stage. It is not growth alone that will measure our success but the bolstering of the underpinnings of that growth that is so often forgotten, our culture, traditions, and lessening the gap between rich and poor. And now is the opportunity to work on those underpinnings... Yes, imports in several countries are now 30 to 40 % more expensive. But on the other hand exporters are 30 to 40% better off. Local manufacturers and producers will become far more competitive in the domestic market, perhaps foreshadowing less reliance on foreign products and services in the medium and hopefully long term. There will be increased rewards for those that "work smarter", and more accountability in the private and public sectors. As noted in an earlier news item, previous fast growth and easy money nurtured inefficent organizational and management practices. Now is the time to seriously look at reducing perks and incentives that are not directly related to productivity, for organizational structures to be flattened and made more efficent. In short, after the party is over.. time for some (un)common sense, in order that the parties to come are far more sustainable...
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