[sangkancil] The Nation (BKK) editorial: Soros and currency woes

[pillai@mgg.pc.my (M.G.G. Pillai)]

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>          The Nation (Bangkok) Editorial
>          Saturday, July 26, 1997
>
>
>          Blaming Soros is no solution to currency woes
>
>          Billionaire speculator and quaint pro-capitalist democracy
>          supporter George Soros does see eye to eye with Malaysian
>          Prime Minister Mahathir Mohamad on one particular issue.
>
>          For years, Mahathir has been a staunch supporter of the
>          besieged Muslims in Bosnia - a country which Soros has aided
>          with his own money from philanthropic foundations. And for
>          that, Mahathir had lauded Soros' magnanimous efforts.
>
>          Not anymore.
>
>          On returning from his two-month sojourn in Europe, Mahathir
>          spoke darkly of a certain ''American financier" who was
>          undermining the economies of Southeast Asian countries by
>          destabilising their currencies. He did not name Soros. But it was
>          clear that he was referring to him.
>
>          Blaming Soros whenever a currency is being raided is not new.
>          What is new, however, is Mahathir's assertion that the current
>          bear run on Southeast Asian currencies is part of a conspiracy
>          by Soros to punish Asean for embracing Burma.
>
>          There is no doubt that Soros was one of the key speculators
>          against the baht, an attack which has since spilled over to other
>          currencies in the region. But while Soros may have led the
>          foray, the real push came from other speculators - institutional
>          investors such as mutual and insurance funds, and
>          non-financial corporations. Some of these speculators are
>          Southeast Asians.
>
>          That's not surprising. For once there is a profit to be made,
>          despite fervent calls for patriotism, few speculators would think
>          twice in partaking in the run on their own country's currency. In
>          this country, we have seen Thais reaping enormous profits
>          from the recent attacks on the baht, and the same is likely to be
>          true for other Southeast Asian countries.
>
>          But if Mahathir thought that Soros would spare poor economies
>          from his forays, he was dead wrong. Currency speculation is
>          never a charitable activity - not even for a philanthropist. It
>          does not profess any political agenda, nor does it differentiate
>          the poor from the rich.
>
>          Mahathir's outburst, however, is a case of sour grapes. It is
>          known that Bank Negara, Malaysia's central bank, often
>          dabbled in currency speculation. A few years ago, it had its
>          hand badly burnt when it was caught short while speculating on
>          the US dollar, resulting in losses running into billions. Surely,
>          Mahathir cannot cry foul when the speculative game is not
>          going his way.
>
>          To blame Soros for the crises sweeping through the currency
>          markets of Southeast Asia is not addressing the real issue.
>
>          When Southeast Asia jumped on the global bandwagon, it
>          should have prepared for the downs as well as the ups.
>          Instead, many have allowed the region's spectacular economic
>          growth to lull them into a false sense of invincibility and
>          security.
>
>          By pegging its currencies, Southeast Asian economies have
>          ensured a certain degree of stability to help lure foreign funds.
>          But such easy money is too often splurged on non-productive
>          property markets and wasteful mega-projects. To add to the
>          woes, billions are squandered through unmitigated corruption.
>          Such excesses are now being ruthlessly punished by the
>          currency market.
>
>          Mahathir is known for his feisty and virulent attacks on the West
>          on everything from incest to human rights. There is a ring of
>          truth to some of his remarks. But often his criticisms are no
>          more than fig-leaves to deflect detractors. One such
>          diversionary remark was his accusation that the West was
>          jealous of Malaysia's economic success, especially when
>          Malaysian companies were chided for their cavalier attitude in
>          other Third World countries.
>
>          His blaming of Soros for Southeast Asia's economic woes is
>          vintage Mahathir. While his far-fetched conspiracy theories may
>          receive a measure of domestic support given his firm grip on
>          the Malaysian media, for the rest of the world he is beginning to
>          sound like an angry old man.
>






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