PBM--Here is the "way" out of the Asian crisis>>
Business leaders propose Brady-type
bonds for Asian crisis
MEXICO CITY Asia-Pacific business leaders proposed Sunday
that governments of the region's most troubled economies issue
bonds guaranteed by governments of their more stable neighbors.
The executives said they would promote the plan in the next few
weeks to governments, ratings agencies and the Asian Development
Bank, which is widely considered the leading candidate to market
the new securities.
The governments of Thailand, Malaysia, Indonesia and the
Philippines have shown "extremely strong support'' for the plan,
said Jeffrey Len-Song Koo, chairman and chief executive officer of
Taiwan's Chinatrust Commercial Bank.
He recently toured the region to discuss the idea with finance
ministers and heads of state.
Taiwan is the only government that has firmly agreed to guarantee
the bonds, but Japan, Singapore and Brunei are also likely
candidates, Koo said. The ADB or another bank would also back
the bonds.
"The beauty of this is that the supporting government probably
won't need to spend a penny, just lend their credit-standing until the
crisis is over,'' Koo said.
Business leaders of the 18-nation Asia-Pacific Economic
Cooperation forum adopted the plan at the end of a three-day
conference largely devoted to finding ways to defuse Asia's crisis.
"If we don't do anything now, just wait another year and we will go
into a tailspin worldwide,'' said Tajudin Ramli, executive chairman
of Malaysian Airline Systems and head of the business group, called
the Asia Business Advisory Council, or ABAC.
Koo, who heads ABAC's financial crisis task force, said he hoped
pull together a more complete package by the middle of the month.
Participants likened the securities to Brady bonds, issued in 1990 to
help lift Latin American governments from debt crises. Bradys are
backed by U.S. government securities.
But business leaders said they were going a step beyond Bradys by
promoting a "new type of convertible government bonds'' that
would be similar to an asset-backed security, designed to help
companies that need foreign exchange.
Just another name for more debt. |
