New Analytical Tomes Fill Bookstore Shelves : Chronicling Asia's Crisis 
International Herald Tribune
March 3, 1999
Thomas Crampton 

MEDIA MARKETS

Few sectors of Asia's battered economies have adapted more quickly to the crisis than bookstores in the region.

The bards of the Asian boom have been relegated to the discount bin while Cassandras of the crisis have taken their place on the shelves, many proclaiming that, if only people had listened, this whole mess could have been avoided.

Written in record speed and almost identically titled —"Asia in Crisis," "East Asia in Crisis" and "The Asian Financial Crisis" all compete for shelf space — the recently published volumes describe the arc of Asia's rise and suggest where things may be headed.

The value of knowing the path that individual economies took into the crisis is well illustrated by a book first published in 1996, "Thailand's Boom." It has been reissued with a few extra chapters, including one titled, "Thailand's Boom and Bust."

As in the first edition of their book, Pasuk Phongpaichit and Chris Baker engagingly relate Thailand's trajectory from agricultural backwater to economic miracle and World Bank poster child and, finally, to the leading indicator of Asia's economic collapse.

Conservative reaction against the country's new and much-vaunted reformist constitution should not be underestimated, the authors warn.

The impressive selection of essays compiled by the Australian economists Ross McLeod and Ross Garnaut in "East Asia in Crisis" tend to concentrate on individual countries but also address broader themes.

The essay on Vietnam, for example, highlights the inherent contradiction of the country's currency-stabilizing capital controls and a free-trade agenda, a notion worth pondering when the case of Malaysia is considered.

Detailing the host of tricks employed to move money offshore through creative accounting of exports, the authors warn that Vietnam's capital controls will inevitably be eroded by free-trade commitments that have already been agreed to in Southeast Asia and Vietnam's eventual membership in the World Trade Organization.

In another essay, Ross McLeod offers unorthodox advice to countries faced with a crisis of confidence similar to that which swept across Asia: Do nothing.

Governments, he concludes, should take the advice given to bungee jumpers: simply relax as the national currency plunges and bounces back to a new equilibrium. His advice comes after watching the way fund managers rushed out of the region while usually putting a negative interpretation on any government attempts to alleviate the crisis.

Asia's banks, antiquated and inefficient, caused the entire economic crisis, according to Philippe Delhaise, the author of "Asia in Crisis."

A quick-paced tour through the region's vaults — from Thailand's greed-driven finance companies to banks in China that effectively distribute welfare by supporting state-owned enterprises — Mr. Delhaise's book highlights how bad bank managers subvert all models of national development.

A former bank manager who now runs the Asian division of the Thomson BankWatch rating agency, Mr. Delhaise explains abstract financial concepts in simple terms and frequently employs concrete examples.

Many of his suggestions are familiar, such as transparency, strong bankruptcy laws and better supervision. But Mr. Delhaise also warns Asia strongly against the neocolonialist foreigners so much reviled by Prime Minister Mahathir bin Mohamad.

For Callum Henderson, a currency analyst, Asia's crisis loomed as soon as the yen fell against the dollar, making exports from the region's dollar-pegged economies too expensive, Mr. Henderson writes.

Writing his book "Asia Falling?" from a foreign-exchange dealer's perspective, Mr. Henderson, a managing currency analyst for Standard & Poor's MMS unit in Asia, follows the crisis country-by-country as it unfolded on traders screens.

The book is laced with quotes from money-losing investors and embattled political leaders. It gives a detailed, if occasionally dense, account of the eight months of financial crisis following the collapse of Thailand's currency.

The nature and extent of the economic changes now under way mean it will be several years before any definitive examination of the crisis can be made.

In the meantime, perhaps the best dedicated source for the story of Asia's economic crisis is the Internet site run by Nouriel Roubini, a senior economist at the White House Council of Economic Affairs.

The site presents a three-dimensional view of the crisis with hundreds of links for further reading and analysis.

It can be viewed at: www.stern.nyu.edu/ ~nroubini/asia/asiahomepage. html.

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