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Strategies & Market Trends : Asia Forum
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To: Stitch who wrote (1233)1/20/1998 6:30:00 AM
From: tom  Read Replies (3) of 9980
 
1. The IMF is, essentially, controlled by the US and clearly will pursue US friendly policies.

2. The IMF has screwed up in Asia and forced many otherwise decent companies into bankruptcy by slamming the domestic economy in a crude effort to stabilize the currency (which has also obviusly failed).
These companies may now need to turn to foreigners (eg the US) to bail them out as the funds cannot be supplied domestically. They will need to do this at fire-sale prices which probably do not reflect the long term value of the assets (eg. you can buy a Semen Cibinong (a cement company in Indonesia) for 20% of replacement cost and a Indah Kiat (a pulp company in Indonesia), the lowest cost producer in the world, for 25% of replacement cost.

3. Does it do a country any good to have its economy run by multinationals? It may increase efficiency and so on but it prevents it from developing its own industries.

4. Why should multi-national banks be bailed out by the IMF for their staggeringly stupid lending decisions (see earlier post re: lending to Steady Safe Taxis)? Citibank gets all its money back and gets a Thai Bank (FBCB.BK) for free? There's something wrong here.

5. Is it really good for the country for the US to come into Asia, fire 50% of the staff for the sake of profit maximization back home. It's great for US but I suspect the social repercussions in Asia could be fairly unpleasant (If you want to do that in Korea then you'll need a private army as well as a team of management consultants)

I say Asia should declare a debt moratorium. Wait five years and all the foreign banks will be knocking at the door again, desperate to lend to them again.
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