Transparency, market creation needed: Advisor<\/p>\n
By Meidyatama Suryodiningrat<\/p>\n
VANCOUVER, Canada (JP): Opening more domestic markets and
\ncreating better transparency are the best remedies for Asia to
\nrecover from its financial crisis, according to a member of the
\nAsia Pacific Economic Cooperation (APEC) advisory council.<\/p>\n
\"They (Asian markets) need to develop stronger indigenous
\ncapital markets, thus reducing dollar-based financing,\" said
\nRobert E. Denham a member of the APEC Business Advisory Council
\n(ABAC).<\/p>\n
He also stressed the importance of strengthening small and
\nmedium enterprises (SMEs) by paying more attention to financing
\nneeds.<\/p>\n
\"They need to get a fair share of the capital market,\" he
\nsaid.<\/p>\n
South Korea is the latest country in the Asia-Pacific region
\nto be hit by financial woes following similar events that
\noccurred in Thailand, the Philippines, Malaysia and Indonesia.<\/p>\n
Denham, who is chairman of the American company Salmon Inc.
\nand also a member the OECD private advisory group, maintained
\nthat the financial slump in many of the countries should not be
\nperceived as a result of liberalization.<\/p>\n
He pointed out that it was often a result of financial and
\nbusiness institutions overextending. \"It is the result of
\nextending credit more out of hope, than from sound banking
\nanalysis,\" Denham remarked.<\/p>\n
Denham and other ABAC members are in Vancouver to meet with
\nthe 18 leaders of APEC on Monday afternoon.<\/p>\n
When asked how such a crisis could be avoided in the future,
\nDenham said such trends could be detected if \"high quality and
\ntimely information\" was available to analysts and economists so
\nthey could accurately diagnose the state of the economy.<\/p>\n
\"Better quality data on the solvency of financial institutions
\nis needed,\" he said adding that \"one of the reasons for the
\ncrisis is insolvent companies.\"<\/p>\n
Denham further noted the need for central banks to release
\ndata on forward currency trading.<\/p>\n
While Denham believes that was only governments who could
\nproduce the necessary data, the press had an important role to
\nplay in serving as a check.<\/p>\n
\"A government does itself no favors by restricting the press
\nand allowing the (financial) problems to fester,\" he said.<\/p>\n
When asked why the turmoil still persisted despite the promise
\nof aid from the International Monetary Fund (IMF), Denham said it
\nwas caused by persisting ambiguities and a perceived lack of
\ncommitment.<\/p>\n
He noted that in most cases, the IMF assistance has only
\nrecently begun and many of the arrangements had not been fully
\n\"fleshed out\".<\/p>\n
He further underlined the need for governments to show a
\ngenuine political commitment to make painful, but necessary,
\nsacrifices during the adjustments.<\/p>\n
\"The commitment of the economy in undertaking these
\nadjustments in a thorough manner has not been established,\" he
\nadded without elaborating.<\/p>\n
Denham was more guarded in his optimism that Asian markets
\ncould recover quickly from the crisis.<\/p>\n
\"The Asian economy has been so great that people had begun to
\nbelieve that the economy could only go one way: up!\" he remarked.<\/p>\n
Denham warned against overconfidence without making basic
\nchanges in the economy.<\/p>\n
\"Many are putting on a brave face but that doesn't change the
\nfact that there is a lot of fundamental reassessments going on,\"
\nhe said. (mds)<\/p>",
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