Foreign Banks Helped Create The Mess In Asia
I enjoy Professor Rudi Dornbusch's writings, but in his latest piece, he has gone overboard ("A bailout won't do the trick in Korea," Economic Viewpoint, Dec. 8). For instance, Dornbusch says that "foreign investors must take over and clean up the mess with a wave of uncompromising corporate and banking restructurings that are long overdue. Neither the government nor the Korean business community can do the job."
Such statements are condescending. I don't want to suggest that Asia has no economic and financial problems. Dornbusch rightly pointed out that excessive liquidity in the world capital market encouraged indiscriminate lending in Asia. This is one source of Asia's predicament.
But I find it strange that he didn't highlight the fact that credit pushers from non-Asian foreign banks should also be blamed for Asia's malaise. Insofar as South Korea is concerned, the International Monetary Fund penned a glowing report on South Korea as recently as three months ago.
Kuala Lumpur, Malaysia