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Reforms must do away with power of
- Subject: Reforms must do away with power of
- From: suriya@xxxxxxxxxxxx
- Date: Sun, 25 Oct 1998 19:43:00
Subject: Reforms must do away with power of corrupt elites
Mailbag
Reforms must do away
with power of corrupt
elites
THE economic problems being
experienced in Southeast Asia are quite
simple and do not require a PhD in
economics to solve. These problems are
due to the freedom of a limited number of
unskilled, powerful people to run and
eventually disable their economies in a
behind-the-scenes manner.
The cries that foreigners are causing Asia's
financial crisis are comical to anyone who
knows just how closed some Asian
financial systems are to foreigners. The
government, which has supported
inefficient organisations run by powerful
entities to the detriment of the average
citizen, has done so in order to appease
big business, as many of the ministers are
also powerful businessmen. No amount of
IMF money will solve the problems until
these practices are ended.
In the countries that have fallen, their
governments had never been very
accountable to the electorate. Rightly so, as
the voters did not really elect them; their
family members and business partners did.
Businessmen in these countries mirrored
the behaviour of government officials
because often they were from the same
families, if not the same people, and always
they had the same interests in mind.
The directors of big business
conglomerates were not accountable to the
shareholders, but instead, chose to borrow
to a scale matching their egos. The bank
were no different. They were not
accountable to the account holders, either.
One method of ending this situation is to
enlist a virtual financial moratorium on these
countries by lenders. These countries have
refused to allow foreign companies
(manufacturing, financial and other
businesses) and foreign citizens to own
property or have an equal opportunity to
compete in business.
The practice of allowing their own nationals'
businesses to operate within an
anti-competitive climate has lead to this
problem. A resolution is not imminent
because foreign money is not going to
come back until the rules of doing business
are changed.
The IMF is the first ''foreign investor'' which
has been able to force these backwater,
corrupt regimes to begin to change their
rules and polices. Low-interest, foreign
money, IMF funds are absolutely necessary
in order to repair these economies. These
countries have held conferences with the
major agenda being ''How to Restore
Confidence in the Region''.
Their agenda should have been, ''How to
Draft Legislation that will Attract Foreign
Investment''. Many of the leaders of these
countries are interested in the perception of
their countries rather than the reality of
them. This is what lead to the problem in
the first place.
As long as these leaders continue to make
surface repairs instead of structural ones,
they will continue to flounder. The wealthy
classes of these countries have already
moved much of their money out of their
countries. As their only way of operating
profitably is in manipulating the government
to produce legislation favoring their
businesses, they will not bring their money
back until the assurance of a system similar
to the old one remains.
As is readily apparent, foreign and local
funds are unlikely to be invested
side-by-side, as these investors are looking
for a different set of rules to play by. The
current economic era has run its course,
and there is no more easy money to be
made by the unskilled powerbrokers in
these countries.
These people will not reinvest whatever
money they have left after the collapse of
their economies unless they can still call the
shots in politics. The people who have run
these countries are not interested in
increasing GNP, but only their share of it,
often to the economic detriment of their
country's economy. The IMF is trying to
change the way that these countries run
their economies, but it will not come soon.
This will take a long time, as the way the
powerbrokers and politicians do business
is the way they live!
The changes required by the Asian
countries experiencing economic
difficulties in order for them to have strong
economies and democracies will take a
generation or more to filter through the
system. How long did the Koreans fight for
democracy, and how about the Taiwanese?
The bailout of the Asian billionaires and
foreign banks will not solve their problems
as the same powerbrokers and cronies will
run, or more truthfully, cripple the country.
The people who ran these economies into
the ground are being kept afloat by their
country's legal system.
Money is not the answer to East Asia's
problems. Changing the political, legal and
economic systems and the people who
operate them is the only way to bring lasting
prosperity to the region. An enhanced
system of democracy, and a more
transparent political system are the only
long-term hopes for returning these
countries to true prosperity, and not just a
prosperous cover.
Derek Sharron
Bangkok