Reforms must do away with power of

[suriya@xxxxxxxxxxxx]

Subject: Reforms must do away  with power of corrupt elites  

Mailbag 

      Reforms must do away
      with power of corrupt
      elites 

      THE economic problems being
      experienced in Southeast Asia are quite
      simple and do not require a PhD in
      economics to solve. These problems are
      due to the freedom of a limited number of
      unskilled, powerful people to run and
      eventually disable their economies in a
      behind-the-scenes manner. 

      The cries that foreigners are causing Asia's
      financial crisis are comical to anyone who
      knows just how closed some Asian
      financial systems are to foreigners. The
      government, which has supported
      inefficient organisations run by powerful
      entities to the detriment of the average
      citizen, has done so in order to appease
      big business, as many of the ministers are
      also powerful businessmen. No amount of
      IMF money will solve the problems until
      these practices are ended. 

      In the countries that have fallen, their
      governments had never been very
      accountable to the electorate. Rightly so, as
      the voters did not really elect them; their
      family members and business partners did.
      Businessmen in these countries mirrored
      the behaviour of government officials
      because often they were from the same
      families, if not the same people, and always
      they had the same interests in mind. 

      The directors of big business
      conglomerates were not accountable to the
      shareholders, but instead, chose to borrow
      to a scale matching their egos. The bank
      were no different. They were not
      accountable to the account holders, either. 

      One method of ending this situation is to
      enlist a virtual financial moratorium on these
      countries by lenders. These countries have
      refused to allow foreign companies
      (manufacturing, financial and other
      businesses) and foreign citizens to own
      property or have an equal opportunity to
      compete in business. 

      The practice of allowing their own nationals'
      businesses to operate within an
      anti-competitive climate has lead to this
      problem. A resolution is not imminent
      because foreign money is not going to
      come back until the rules of doing business
      are changed. 

      The IMF is the first ''foreign investor'' which
      has been able to force these backwater,
      corrupt regimes to begin to change their
      rules and polices. Low-interest, foreign
      money, IMF funds are absolutely necessary
      in order to repair these economies. These
      countries have held conferences with the
      major agenda being ''How to Restore
      Confidence in the Region''. 

      Their agenda should have been, ''How to
      Draft Legislation that will Attract Foreign
      Investment''. Many of the leaders of these
      countries are interested in the perception of
      their countries rather than the reality of
      them. This is what lead to the problem in
      the first place. 

      As long as these leaders continue to make
      surface repairs instead of structural ones,
      they will continue to flounder. The wealthy
      classes of these countries have already
      moved much of their money out of their
      countries. As their only way of operating
      profitably is in manipulating the government
      to produce legislation favoring their
      businesses, they will not bring their money
      back until the assurance of a system similar
      to the old one remains. 

      As is readily apparent, foreign and local
      funds are unlikely to be invested
      side-by-side, as these investors are looking
      for a different set of rules to play by. The
      current economic era has run its course,
      and there is no more easy money to be
      made by the unskilled powerbrokers in
      these countries. 

      These people will not reinvest whatever
      money they have left after the collapse of
      their economies unless they can still call the
      shots in politics. The people who have run
      these countries are not interested in
      increasing GNP, but only their share of it,
      often to the economic detriment of their
      country's economy. The IMF is trying to
      change the way that these countries run
      their economies, but it will not come soon.
      This will take a long time, as the way the
      powerbrokers and politicians do business
      is the way they live! 

      The changes required by the Asian
      countries experiencing economic
      difficulties in order for them to have strong
      economies and democracies will take a
      generation or more to filter through the
      system. How long did the Koreans fight for
      democracy, and how about the Taiwanese?

      The bailout of the Asian billionaires and
      foreign banks will not solve their problems
      as the same powerbrokers and cronies will
      run, or more truthfully, cripple the country.
      The people who ran these economies into
      the ground are being kept afloat by their
      country's legal system. 

      Money is not the answer to East Asia's
      problems. Changing the political, legal and
      economic systems and the people who
      operate them is the only way to bring lasting
      prosperity to the region. An enhanced
      system of democracy, and a more
      transparent political system are the only
      long-term hopes for returning these
      countries to true prosperity, and not just a
      prosperous cover. 

      Derek Sharron 

      Bangkok