August 21, 2011
http://www.thesundaily.my/news/116631
BOOK Review
Asians can think
by Dr. G. Sivalingam*(August 19, 2011)
NOTES to a Prime Minister details Tan Sri Nor Mohamed Yakcops communications or advice to Prime Minister Tun Dr Mahathir Mohamad in connection with a conflict of a Asian Financial Crisis in Jul 1997 to Aug 1998 when Malaysia introduced unusual collateral controls to save a genuine manage to buy from speculators as well as a IMF, which was obviously possibly sick sensitive or had an evil pattern to in essence renovate a ownership structure of a resources of a essentially clever genuine manage to buy of Malaysia.
One comes out of a celebration of a mass which it was Nor Mohameds brilliant research of a predicament which led him to convince a Prime Minister to impose collateral controls. Many have argued which a collateral controls came a bit as well late since most of a supports had left a economy, when collateral controls were finally introduced upon September 1, 2011. However, a Prime Minister according to a records released in this edited book had taken in to care all aspects of a situation as well as acted responsibly to save a genuine economy, jobs as well as businesses which otherwise might have been eliminated via trouble sales to a foreigners.
This is discordant to a perspective voiced in tip harvesting machine educational journals which collateral controls were introduced to save a Prime Ministers cronies. A suspect process was used by a authors of these educational articles to brand cronies as well as a interpretation manufactured was subjected to vigorous systematic testing to furnish a largely erroneous conc! lusion. This obviously shows which scholarship can be used to crush reality. It is ! timely t shawl a release of this book puts an end to a crony hypothesis of collateral controls which has been in vogue for a little time.
I would not demur to suggest this book for a graduate course in International Finance as it gives a minute comment of hedging as well as forward trading strategies as well as a workings of a general monetary markets upon a day to day basement as a predicament unravels. The records have been a papers of an consultant in a field of general monetary with a minute believe of forward markets as well as instruments used for speculation in both made during home as well as general monetary markets which have been interlinked. The students will find this book of immense worth since it brings to hold up theory in a Malaysian setting.
Nor Mohamed rightly takes issue with a actuality which Malaysias pot during a predicament were deposited in foreign banks like Citibank in Europe as well as a US rather than in a made during home banks located in a Labuan Offshore Financial Centre. This is definitely suggestive of a colonial era.
However, what is some-more deleterious from a monetary indicate of perspective is which Bank Negara deposits a money in foreign banks during a low seductiveness rate as well as when Malayan promissory note needs foreign pot it needs to steal from a bank in Europe during inflated seductiveness rates. What Nor Mohamed righteously questions is why could not these supports be deposited offshore in a Malaysian bank in Labuan as well as used during preference to sentinel off banking speculators.
During a Asian Financial Crisis, a IMF as well as a supporters in Malaysia were pulling for tall sedu! ctivenes s rates, Nor Mohamed rightly argued opposite a offer to increase seductiveness rates. His argument is which seductiveness rates should be increased during a boom as well as not a recession.
The cou! nter arg ument was which augmenting seductiveness rates would capture reduced tenure supports as well as this will help to make firm a ringgit which was afterwards in a giveaway fall. However, augmenting seductiveness rates will means a batch marketplace to crash as margin financing might turn as well dear as well as as a outcome speculators as well as hedge supports will move their money out of Malaysia as well as means a ringgit to depreciate further.
Nor Mohamed additionally forked out during a time of a predicament which tall seductiveness rates will outcome in corporations not being able to service their loans as well as as a outcome a non-performing loans (NPLs) of banks will increase.
Nor Mohamed additionally creates a scold indicate which a fundamentals of a Malaysian manage to buy were clever during a conflict of a Asian Financial Crisis in 1997 as well as continued to be clever via a crisis. The giveaway tumble of a ringgit was afterwards a work of banking speculators driven by animal spirits or what Nor Mohamed prefers to impute to as greed as well as fear.
The actuality a genuine manage to buy was clever was upheld by a actuality which exports were clever as well as FDI was still pouring in. Job waste were during a minimum. The Japanese had additionally taken a perspective which a genuine manage to buy was essentially clever as well as had volunteered to set up a Asian Monetary Fund (AMF) to provide supports to kill a speculators during their own game. However, a Americans as well as a IMF objected to a setting up of a AMF.
As forked out by (Jagdish) Bhagwati of Columbia University, a US Treasury-Wall Street complex together with a IMF were bent upon formulating havoc by driving a ringgit to a giveaway tumble by suggesting which a Malaysian manage to buy was riddled ! with cor ruption as well as cronyism as well as over-investment in lease generating complicated collateral investment projects.
Even Nobel Laureate, A.K. Sen vocalization in Singapore during a time of a predicament was confident of liberation since he forked out which a genuine manage to buy was essentially strong.
The most discredited IMF had to eat a own words when years after a predicament it had to confess w! ith most piety which collateral controls have been necessary in a little situations.
Nor Mohameds records have been additionally some-more than enough to answer a question: Can Asians think? 
The records obviously uncover which not only can Asians consider but they can consider creatively as well as have been dauntless enough to consider opposite a stream, which is laudable.
This book confirms which it was a nerve-racking time for both Mahathir as well as Nor Mohamed but they managed to locate a bull by a horns as well as drive a manage to buy behind in to a trail of sustainable tall economic growth. This is a most appropriate book upon a Malaysian manage to buy which we have read for a little time.
*G. Sivalingam is Visiting Senior Research Fellow, Institute of Southeast Asian Studies in Singapore. Notes to a Prime Minister: The Untold Story of How Malaysia Beat a Currency Speculators by Wong Sulong is published by MPH Publishing, Kuala Lumpur (Price: RM69).
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