A Southeast Asian lesson

A Southeast Asian lesson

The money crises shaking Thailand, Malaysia and Indonesia have
put the future of Southeast Asia's economic miracles at risk. At
this unexpectedly difficult time, these Asian "tigers" could
retreat toward prejudice and protectionism, sealing their fates
as economic backwaters. Or they could tackle some of the
fundamental problems that led to their current troubles, in which
case they could well resume within a year or two the economic
growth that has been their hallmark for more than a decade.

Unfortunately, Malaysia's Prime Minister Mahathir Mohamad has
become the leading apostle of the first option. The prime
minister was until recently identified with Malaysia's
spectacular success. But since the currency and stock market took
a dive this summer, Mr. Mahathir, Malaysia's leader since 1981,
has blamed just about everyone but the man in the mirror.

A possible International Monetary Fund (IMF) rescue of
neighboring Indonesia could take that country in a different
direction. An IMF bailout is by no means unalloyed good news. It
would put U.S. government dollars at risk. A well-managed plan,
though, as in the rescue of the Mexican peso, can minimize the
risk.

More dangerous, a bailout might signal to other developing
countries -- and to those who invest in them -- that they can
pursue whatever foolish policies they want, because the IMF will
bail them out when things go sour. The right kind of bailout for
Indonesia could mitigate that danger by showing that rescues are
not cost-free -- and at the same time could help set Indonesia on
a more sustainable course.

-- The Washington Post