Currency drama

The script is by no means finished, but the recent currency drama could have a strong effect on Southeast Asia. It is, perhaps, fitting to view this issue in terms of a financial statement. On the plus side of the balance sheet is the news that most Asian currencies enjoyed a brief respite yesterday. Indonesia's rupiah, for example, posted its strongest daily gain in six years. On the minus side is the fact that some leading figures have begun to address the issue in political rather than economic terms. Was Malaysian Prime Minister Mahathir Mohamad shooting from the hip when he accused speculators of playing the currencies for political ends?

Although he refrained from naming anyone, Mahathir's remarks have been interpreted as a thinly veiled attack on international financier George Soros. If Mahathir has been correctly quoted, and if his accusations turn out to be true, then the target of his charges must be condemned in no uncertain terms. One man must not be allowed to impose his will on the foreign policies of other countries. It amounts to economic blackmail, even terrorism. But if Mahathir does not produce hard evidence to support his accusations, he will lay himself open to the charge of seeking a convenient scapegoat to excuse the economic emergency in his own country. Critics may wonder why a currency, as strong as the Malaysian ringgit, was allowed to come under attack.

In the heat and passion of political polemics, important issues are sometimes addressed in terms that appeal to the adrenal glands rather than to the brain cells. But calm and rational arguments, not inflammatory rhetoric, are needed in complex, emotionally charged and politically sensitive issues. And those arguments must be supported by hard evidence.

-- The Hong Kong Standard