Re: A story from the Financial Review

["Dr. Bruce R. McFarling" <Bruce.McFarling@xxxxxxxxxxxxxxxx>]

On Fri, 24 Jan 2003 19:21:52 +1100,
John Legge <jlegge@xxxxxxxxxxxxxx> wrote:

>This article from the Financial Review may be of interest

>Dr Mahathir is saying what many on this list beleive

>IMF a ticket to disaster: Mahathir

Well, yes, of course.  Even though it may be a bit
self-serving of Dr Mahathir, given the reasons
why the IMF prescriptions were a ticket to disaster.

(1) The problem was that international lenders
fell over themselves to lend unsecured loans due
in hard currency to Southeast and Northeast Asian
borrowers, creating a creditary boom without the
risk of a downturn being shared between parties
or assured against by effective institutions.

(2) In other words, the problem was "liberalisation"
of "capital markets".

(3) The IMF solution is that "capital markets" were
not 100% "liberalised" and that eliminating all
sovereign controls on financial capital mobility
is part of the process of fixing it.

Dr. Mahathir never whinged in the early 1990's about
the money showing up to finance his grand schemes.
The damage is planted in the boom and reaped when the
bubble bursts.