More liberalization needed

More liberalization needed

By his remarks yesterday (Tuesday), Singapore Prime Minister
Goh Chok Tong confirmed his status as the markets' good cop in
the routine he occasionally plays to Dr. Mahathir's bad cop. Mr.
Goh's call for greater transparency, more -- not less --
financial liberalization and the need for East Asian nations to
take tough but necessary measures to get their economies back on
track was music to the ears of the market-movers who Dr. Mahathir
excoriates.

Mr. Goh was right when he told the East Asia economic summit
in Hong Kong that only these fundamental reforms would provide
the foundation for sustained economic growth in the region. More
to the point for Mahathir-watchers, Mr. Goh said the currency
crisis was a direct consequence of market forces. We cannot and
must not turn the clock back. Rather we must turn it forward. It
is the sort of reasoned and pragmatic approach we have come to
expect from the Singaporean leadership.

Thailand, where the currency crisis began with a series of
speculative attacks in May leading to the baht's devaluation on
July 2, appears to have taken Mr. Goh's advice to heart with its
restructuring package. Its belated recognition of massive
financial sector problems led to the International Monetary
Fund's involvement and an eventual US$17.2 billion rescue
package for Thailand.

Australia, which is a contributor to those IMF loan
arrangements, wants to see the Thai economy back on the recovery
path as soon as possible. It is in our commercial interests for
that to occur. A number of observers now take a pessimistic view
of the impact the Southeast Asian crisis will have on the
Australian economy, given that about 10 percent of our total
exports go to Thailand, Indonesia, Malaysia and the Philippines.

While that is cause for concern, there should be no dispute
that the economic fundamentals favor Asia's recovery. As Mr. Goh
said yesterday (Tuesday), despite the hiccups in East Asia's
financial sector, its economies will grow robustly in the medium
and long term.

-- The Australian