A time for reforms, not gloating

The verdict on Asia's financial morass, as proclaimed by a procession of economic gurus, was emphatic. The culprit, they said, is the "Asian model" -- a development strategy based on hand-in-glove collusion between governments and businesses. What they badly need now is more liberalization and American-style capitalism.

Still, uncomfortable questions remain. How can a nation be held up as a model one day and blamed for mismanagement the next? And why are analysts so quick to pinpoint the errors of these countries, and so eager to recommend specific reforms, when only a few months ago they were recommending investment in these economies?

Last week, in the Interim World Economic Outlook report, the International Monetary Fund (IMF) argued that hedge-fund investors were not to blame for the financial markets crisis engulfing Asia. While hedge-funds shouldered some of the blame for the crisis, particularly in Thailand, the IMF concluded that they did not appear to have been a major driving force on the downward pressure of currencies of the ASEAN countries.

This surely will not make Malaysian Prime Minister Mahathir Mohamad very happy. He prodded the IMF to make the study. But there seems to be a wind of resignation and realism sweeping across Asia in the wake of its monetary meltdown. "We have to accept that in this world there is no equality," Mahathir said. "Might is still right."

It's time that the IMF, and its main sponsor, the U.S., listen to the voices emanating from Asia. Yes, Asia must undertake reforms to wipe out corruption and to strengthen democracy. But similarly, the global economic system must also undergo reforms.

Doing business today is no longer the same as doing business two, or even one, decade ago. Large amounts of capital can now move in and out of a country with lightning speed -- at a keystroke, in fact -- often leaving economies in ruins. Nobel laureate economist James Tobin recently called for throwing sand in the wheels of international financial transactions. He has suggested a tax on financial speculation to help cap the volume of unproductive volatility in exchange rates.

Indeed, many Asian governments have been accused of displaying a "denial syndrome" when the crisis first took its toll. Judging from last week's IMF interim report, it appears the organization is, likewise, in a state of denial.

-- The Nation, Bangkok