|Laman Webantu KM2A1: 4786 File Size: 7.8 Kb *|
Asia: Happy Days Ahead? False Sense Of Security
By David Roche
21/6/2001 9:28 am Thu
[Ekonomi Amerika dan Jepun yang tenat membuatkan pelabur
lebih berhati-hati di mana mahu meletak wang mereka. Sekarang
ekspot negara sudah berkurang dan banyak kilang sudah tutup
serta beribu-ribu pekerja sudah digugurkan - termasuk syarikat
gergasi IT seperti Acer. Kali ini Mahathir tidak akan dapat
mempersalahkan Soros lagi kerana dialah yang sebenarnya boros.
Dunia kini sudah tanpa sempadan dan hanya kepintaran yang menjadi
penentu kejayaan - bukannya tempat atau prasarana walaupun ia
lengkap dengan pelbagai kemudahan. Berbilion-bilion yang dilaburkan
itu hanya sia-sia belaka selagi otak yang ada tidak cekap dan
lengkap. Kejayaan MSC bergantung kerpada otak dan itu semua
bersarang di pusat pengajian tinggi bukannya di MSC.
Mahathir bolehlah gembira dipuji di PWTC sekarang, tetapi rezab
asing negara yang semakin berkurang itu bukannya boleh ditambah
dan dimanipulasikan sebagaimana permainan saham. Sudah pelbagai
formula diajukan pada tahun ini sahaja, termasuk menjatuhkan Daim
tetapi rezab negara tidak naik-naik juga. Sepatutnya Mahathir
mengaku kalah sahaja kerana peladang kelapa sawit kini sedang
menderita dan ramai pekerja kilang sudah kehilangan kerja.
Mereka itu semua menjadi mangsa keegoan Mahathir yang banyak
tidak berguna daripada berguna.
by: David Roche
If you thought everything that could go wrong with Asia has
gone wrong, you are wrong. Something else is about to
happen that will make the long-run pain even greater, but
may provide a little short-term gain for investors.
One of the great benefits of globalization is that the US
benevolently spread the largesse of its riches among the
emerging markets of the world by putting its electronic and
other factories abroad. This boosted growth for the poor
countries dramatically, as long as US IT demand was
growing at 25% a year.
But what if the US goes into hi-tech recession? Then the US
suffers less and Asia more. And the US hi-tech boom is
over. In 2001, US import demand for what Asia sells could
Take electronics. Asia's exports of electronics are very big
expressed as a percentage of GDP (though the impact on
GDP is actually a function of the value-added in the
producing country and not the gross value of the export
figure itself). If Asia's technology exports to US fall 6% in the
first half of this year, as I expect, and then recover to where
we are now by year-end, most Asian countries will lose
between 1% and 4% points of real GDP growth in 2001. That
will contribute to halving the growth rates achieved in 2000.
Turning off the tap
And here lies Asia's other big problem. Back in the mid
1990s, Asia wasted capital like free water out of a faucet.
That brought on the crisis of 1997-98. But since then, Asia
has failed to reform the root cause of its crisis: the financial
system. Leverage in Asian economies has barely shrunk
since 1996. That tells a sad story.
Banks were not restructured. They were bailed out, but not
reformed. In other words, their lousy loans may have been
bought out and their balance sheets puffed up with
taxpayer's money, but their customers/borrowers got off with
hardly a scratch. Where borrowers should have been
bankrupted and the economy cleansed of dead investments,
the insolvent have been kept alive on a drip feed of failed
foreclosure laws and rescheduled debts. The price of Asia's
softly-softly approach will be paid for by lower growth and
higher taxes for the next decade.
Back in the days of the `Asian miracle', the mantra of
investors was that "politics didn't matter". The argument was
that the Asian litany of family values, work ethic and the
pursuit of the last buck made the economic miracle an
investment miracle without the need for the backing of the
rule of law or solid institutions of state.
Of course, that was nonsense. The Asian crisis of 1997-98
may have been caused by mispriced capital unprofitably
invested, but sustained recovery requires solid institutions of
state that Asian despot capitalism has yet to give way to.
After the crisis, political and financial reform started in Korea,
Taiwan and even Thailand and Indonesia. And everywhere,
the old politicians were replaced.
Looking for a miracle
Since the crisis, Asia has gone in for democracy in a big
way. That's great news. But the cyclical recovery has duped
Asia's leaders into thinking the crisis was over. Now reform
has slowed to a crawl (or even reversed). Yet Asian
countries remain saddled with the unresolved problem of a
stock of bad assets and bad debts. And most have
dysfunctional institutions and markets to allocate capital.
Only a strong civic society, solid instruments of state and
visionary political leadership could address these needs. But
these are the commodities in shortest supply in the region.
As a result, Asia's miracle will not be repeated..
Instead, the price of democracy is that you can be quite sure
that Asia's elected leaders will do something populist about
the growth-less state of their restive electorates. That
something will be this: they will bail out their banks and very
probably spend money they don't have to do so.
Now Asia can just about afford to bail out its banks of their
remaining bad debts at inflated prices. Bailing out the banks
would move interest payments (in relationship to government
revenues), public sector debts and deficits up to the limits of
what's tolerable for emerging markets. Tax burdens would
jump. And if the record so far is anything to go by, the bank
bailouts are most unlikely to create efficient banking systems
as the core of any return to the Asian growth `miracle'.
But the bailout will create a liquidity cycle that could give a
fillip to stock markets - particularly banks. But don't confuse
it with reform. If you go for the greater fool theory, equity
markets, gunned on by locals, may perform for a while. But
populist policies can only be financed if interest rates are
kept low. Asia's current account surpluses and international
reserves will suffer as domestic demand is boosted and
electronic exports fall back.
A false sense of security?
The most likely scenario for Asian markets is that they get a
boost from falling US interest rates and rising risk appetite
globally. But exchange markets will weaken East Asian
currencies. Indeed, they are already doing so. The growing
gap between Asia's current account surplus and the
accumulation of international reserves tells a sad tale of
capital fleeing the region for safer shores. Even Japan's
woeful state and collapsing yen is starting to send its huge
stock of surplus savings to safer climes for better gain.
And foreign investors are less likely to be suckered than
locals by Asia's liquidity cycle. If world equities are set to
recover as the Fed cuts rates, there are plenty of
opportunities stateside and in relatively well-run emerging
markets like Singapore and Hong Kong that may make our
better fortune than buying the equities of the likes of
Malaysia, Philippines, Indonesia or Thailand.
David Roche is head of research firm Independent Strategy.