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Strategies & Market Trends : Asia Forum
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To: Zeev Hed who wrote (1855)2/1/1998 9:24:00 PM
From: Rational  Read Replies (1) of 9980
 
Zeev:

There was no implicit or explicit (semi or full) guarantee by either the Korean or the Indonesian governments for the private sector debt.

The real story is that banks have been expanding their credit recklessly in SE Asia, lured by the growth, without doing homework and ingratiating the favor of governments, often bribing them for getting the approval of joint ventures that they could fund. Banks and foreign companies were as much a part of the corruption as the local companies and governments.

Unfortunately, it is the innocent people in these countries who will bail out all the corrupt rascals. Kim DJ of South Korea has already initiated American-style congressional hearings. Indonesians will not, however, have an opportunity to do the same because Suharto will unlikely be unseated from power.

I concede that we have a vastly different perspective of the problem.

Sankar
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