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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: John B. Smyth who wrote (2789)	3/29/1998 6:37:00 PM
From: Stitch	Read Replies (1) \| Respond to of 9980

John, Malaysia is in better shape then is Indonesia. While there have been issues of reform, bank losses due to bad debt, lay offs in the construction sector, stoppage of infrastructure and mega projects, etc. there has not been wholesale loss of jobs yet. Inflation has been running about 12%, primarily food prices. Malaysia has been so caught up in its economic rise that it has allowed farmland to go fallow over the years and government is targeting reforms to increase local food production. It is still largely a net importer and likely will always be. Malaysia has not required IMF assistance. For one thing IMF invlovement would be politically remote now. Mahatir has been scathing in his remarks about the IMF, Wesern business practices, and money trading. But in the midst of the rhetoric there has been policy changes as well. I generally believe that Malaysia could lead a recovery except that the government needs to accelerate on policy change and Mahatir needs to tone down his rhetoric. For an interesting report on Indonesia and Malaysia as well as other Asian countries go to the following URL: asiarisk.com In addition bank Negara, the central bank in Malaysia, has an interesting web site: bnm.gov.my Some sectors here have been hit hard. Banking is getting most of the attention now but the auto sector, capital goods, luxury items, commercial real estate, and construction have been hit hard. There are storys of empty freighters showing up at Port Klang, as there is nothing coming in. Malaysia is repatriating its foreign labor in preparation for cutbacks in the industrial sectors. This has caused some local problems especially with the hundreds of thousand Indonesians. There was rioting recently when authorities attempted to kick out several thousand immigrant workers. Recently revised goverment estimates suggest that growth this year will slow to 2.5% The big questions remain whether Malaysia is moving fast and far enough in reforms and whether Mahatir has permanently damaged the nation's ability to reattract foreign investment. As usual, only time will tell. Hope the above helps. Best, Stitch