International -- Readers Report
BRAZIL NEEDS IMF FUNDS--AND CARDOSO'S REELECTION (int'l edition)
Ian Katz's comments on Brazil's President Fernando Enrique Cardoso and his decisions vis-a-vis the international financial crisis are off the mark ("Brazil doesn't need a bailout. It needs leadership," Latin America, Sept. 28). His suggestion that Cardoso should have imposed a strong recessionary program and convinced the people that it is the best way to go just weeks from the presidential election is naive. Cardoso was facing an opponent of the unreconstructed Latin American left, and his reelection was the priority of Brazilians and businesspeople across the continent. For much less, President Bush lost in a country where the average voter schooling is 12 years, vs. four in Brazil.
Brazil doesn't need to be bailed out, but a line of credit from the International Monetary Fund and the Group of Seven will assure a more prompt return to growth. Look at the costs of the do-nothing alternatives.
Also, we need to set traffic rules for international flows of flight money. Red lights, no parking at all. Brazil wasn't brought into the storm epicenter because it has a huge fiscal deficit but because it is large and its assets are liquid. After all, Mexico and Argentina have been more fiscally conservative and are suffering all the same. Right now, international markets are irrational. In view of that, which is the best course of action?
Sao PauloReturn to top
CHINA'S CELLULAR MARKET IS GETTING BIGGER, AND TIGHTER (int'l edition)
In "Struggling to stay plugged in" (Asian Business, Sept. 28), you mentioned that the number of Chinese cellular-phone users is more than 30 million now and that the Ministry of Information Industry (MII) is a "big, mean rival" to China Great Wall Co.'s Code Division Multiple Access network. In fact, according to industry statistics, China achieved the 20 million cellular users goal in August, 1998, more than four months ahead of the original yearend target. Obviously, with the fast development of the Chinese cellular industry, the 30 million milestone can be expected soon, but to say it's more than 30 million is misleading.
Also, at least in Shanghai, the MII-controlled China Telecom is not a rival to the CDMA network. On the contrary, it is promoting CDMA with other cellular services, such as GSM and DCS 1800. The reason? The CDMA network is now operated by China Telecom, and China Great Wall is not an independent player anymore. So whether or not to nationally roll out the CDMA network is more of an internal issue of MII rather than an external one, and the decision would be based largely on business factors such as investment, market acceptance, and the number of international roaming partners. Currently, the China Telecom Global System for Telecommunications network has roaming agreements with more than 30 countries, which is significantly more than the CDMA network does.
ShanghaiReturn to top
ARGENTINA'S EXPERIENCE: DEVALUATIONS DON'T WORK (int'l edition)
I wish to congratulate BUSINESS WEEK for "Lessons from the brink," (Editorials, Sept. 21). It seems to me that BUSINESS WEEK is the only business publication that has taken notice that conventional wisdom merits revision in a vastly changed global environment. I found particularly interesting your comments about the failure of devaluation to prop up sinking economies. Living in Argentina and having experienced 20 years of high inflation, high devaluation, and two hyperinflations, I can assure you that devaluation is no longer efficient in a world where suckers willing to accept painted paper keep getting scarcer. The IMF stance of promoting devaluation and, at the same time, fiscal balance, is like telling someone to initiate a starvation diet and at the same time exercise three times a day to stay fit. Either alternative is bound to fail.
Buenos AiresReturn to top