U.S. defends Soros against currency accusations

PETALING JAYA, Malaysia (JP): The United States defended American billionaire George Soros yesterday against ASEAN members' accusations that he was behind currency fluctuations, arguing that the crisis was caused by economic forces.

U.S. Undersecretary of State for Economic, Business and Agricultural Affairs, Stuart E. Eizenstat told ASEAN foreign ministers that there was no evidence to show that the fluctuations were caused by speculators.

"Market movements are not dominated by a small number of currency speculators, let alone one person, who happens to be a U.S. citizen," Eizenstat said.

Ministers of the Association of Southeast Asian Nations (ASEAN) at a meeting Thursday expressed their concern and intention of fighting the sudden currency plunges, alleging that it was a politically motivated concerted effort.

Malaysian Prime Minister Mahathir Mohamad went a step further naming financier George Soros as the culprit. Mahathir said Soros, a strong critic of Myanmar, wanted to punish ASEAN for admitting Myanmar as a member.

With the admission of new members, ASEAN now groups Brunei, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Speaking in front of ASEAN foreign ministers at yesterday morning's session of the Post Ministerial Conference, Eizenstat said "it is no one's interest to undercut economies of the ASEAN countries."

"Financial markets detected strains in the economy of one of the ASEAN countries and reacted accordingly," he said referring to the crisis which first hit Thailand.

"In an increasingly integrated region this had a mild spillover effect in other countries in the region," he explained.

Eizenstat suggested ASEAN should make policy reforms to deal with exchange rate pressures, tighten guidelines for financial supervision and improve economic fundamentals.

Another U.S. official, State Department spokesman Nicholas Burns, also decried the accusations against Soros.

"It is not appropriate to blame those problems on one individual. Currency fluctuations historically ... are caused by economic forces, not by one individual," he said.

Burns lauded Soros' reputation saying that the U.S. feels very strongly about the accusations.

"George Soros is an honorable man, he's a man that's done a lot of good in the world," Burns said.

Separately, Malaysian foreign minister remained steadfast in defense of Mahathir's comments despite the U.S. objections.

"I'm sure he (Mahathir) has evidence, otherwise he wouldn't have said it," Badawi said.

In the meeting, Badawi said it was troubling that ASEAN continued to be hit by currency fluctuations caused by "hostile elements bent on such unholy actions."

"We in ASEAN have resolved to intensify actions to take counter measures," he said without elaborating. "It is time we recognize these actions for what they really are, namely villainous acts of sabotage." (mds)