Currency drama

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