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Asia Will Rise Again If Only By Selling Assets (Int'l Edition)

International -- Readers Report

Asia Will Rise Again--If Only by Selling Assets (int'l edition)

The collapse of Japan Inc. is a reality ("Asian crisis," Cover Story, Feb. 15), and the economy faces a massive meltdown. When that happens, no one, not even the IMF, can save Japan Inc. And it will take the rest of Asia with it.

Japan's wealth is a mirage. A large part of Japan's wealth came from massive public spending, which fueled the economy for decades. Over the years, the government pumped an enormous amount of money into the system. By doing so, Japan drove up real estate prices to the limit. The result is the over-bloated balance sheet of today's Japan Inc.

Now that the party is over, businesses are not making enough profit, and public debt is out of control. No matter how much money the government spends, it can't resuscitate businesses because business is not competitive in the global environment. And those companies are encumbered with obligatory life-time employees and excessive tax rates, strict regulations and compulsory public policies. The only self-reliant part of the economy is export-oriented manufacturing. Most industries lost vigor and ingenuity through excessive government meddling and subsidies.

For Japan, wealth is a burden. With too many white elephants as a result of massive government spending, central and provincial governments are saddled with huge maintenance costs. Compared to the gigantic proportion of public debts, the financial sector problem is rather a small matter.

Perhaps the only way to alleviate Japan's illness is to let foreigners buy undistressed corporate assets and real estate. But Japan has to hurry, because Korea, Thailand, and other countries are selling their assets aggressively. And Japan's assets are no bargain.

Koshiro Yamaoka

Bangkok Shuho Co.


I am deeply resentful of and disgusted with the force-fed and glaring media coverage of the "Asian crisis." While the articles wax lyrical about the "sad," "hopeless," or "nightmarish" state of affairs (to use a few of the celebrated words that are used to describe Asia now), the underlying attitude is pompous: The Western powers put us back in the Middle Ages, where they think we belong.

Don't forget, Japan took less than two decades to creep out of the rubble of the Second World War and Hiroshima to transform itself into one of the world's strongest and most respected economies. There is no need to run articles that merely point out our failings when you do not intend to do anything but be smug about them under the pretense of pity.

Remember this--the phoenix always rises again from the ashes. The Asian community has always prided itself on this. We have gone through wars, we have gone through communism, and we have gone through hell and back.

You see, we come from a long line of ancestors that just don't seem to die. Physically, yes. Ultimately, no. Because their fighting spirit lives on in us.

Aileen Yapp

MalaysiaReturn to top

A Little Bit Better Than the Average Fund (int'l edition)

In "Offshore funds: Asia shakes the flu" (Finance, Feb. 1), your extensive coverage of the Asian and South American economies and markets gave good insight into why the funds invested there did badly in 1998. However, you did not mention why the Hermes Egypt Fund was included in your "Worst List." First, in 1998, the Egyptian stock market, having been affected by the events that you explained in your article, was hit negatively. Second, the IFC Egypt Index (in local currency) had a negative return of 30.72% for 1998. We outperformed it by 14.62%. Finally, the returns for the fourth quarter, 1998, for the Hermes Egypt Fund were minus 5.63%, not 6.28% as you quoted in your table; and for the whole year the returns were negative 16.10%, not 18.03%.

Sherif Salem


Asset Management

Giza, EgyptReturn to top

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