Conference panelists examine causes, effects, solutions of Asian economic crisis
The Chicago Maroon
By Pamela Appea
The Singaporean and Malaysian Students’ Union and the Hong Kong Students Association (HKSA) at the University of Chicago hosted an economic conference last Saturday afternoon at the Biological Sciences Learning Center.
The conference entitled “The Asian economic crisis: Is There a Solution?” featured several academic and business representatives.
Before the conference, members of the Spartacist League and the Spartacus Youth Club congregated outside the building to protest International Monetary Fund’s (IMF) recent offer to lend $43 billion dollars to Indonesia to aid the country’s faltering currency, the ruppiah.
IMF offered the loan in an attempt to avert economic collapse, but a representative of the organization said that employees of “U.S. Imperialism” and the CIA should not be involved.
Peter Ho, president of HKSA and a second-year student in the College, said the aim of the conference was not only to increase awareness of the economic problems in East Asian countries and their significance in the global economy, but also to analyze the origins of the crisis and propose plausible solutions.
The first panel discussion featured James Yuen, director of the Hong Kong Trade Council; Jack Chiang, deputy director General of the Tapei Economic and Cultural Office in Chicago; and Glenda Wenchi Kao, professor of Finance at DePaul University. Other panelists included Dali Yang, assistant professor of Political Science atthe U of C and Robert Z. Aliber, professor of International Economics and Finance at the Graduate School of Business (GSB),who served as moderator for both panel discussions.
Yuen discussed the continued viability of the Hong Kong market since the 1997 reunification of Hong Kong into Communist China.
He explained how How Kong has continued its free trade system, despite political changes.
According to Yuen, investment and business opportunities still exist in Hong Kong. He said his main concern was currency devaluation and rising price of land and property, but added that Hong Kong’s current economic policy has spelled prosperity.
“Our recovery will be faster than any other country,” he concluded.
According to several other panelists, countries such as Thailand, Indonesia, mainland China and Japan have been more seriously affected.
“You really have to have a prudent economic policy. Probably what went wrong in Thailand is that people were getting overzealous with the stock market,” said Kao. She pointed to the fact that in the nineties, property companies were building numerous condominiums and shopping malls, especially in the capital city of Bangkok.
“Banks gave out loans without checking. The end result was that it brought a lot of uncertainty,” she said.
According to Kao, when investors began to realize a possible economic slump, they panicked.
“People were trying to change the currency,” she explained. The baht deeply depreciated in mid-to-late 1997 and Thailand went into a state of economic depression.
“There are no winners in the Asian economic crisis. There are survivors and there are losers. If you run on borrowed money, you run on borrowed time,” added Yang.
“The [first] panel wasn’t as effective because two of the panelists were representatives of the government,” said Jennifer Rim, a fourth-year student in the College.
“It didn’t really address any of the issues that we came here to talk about: hard core social problems [in Asia,]” she said.
The second panel discussion focused more on strategies for economic reform. Kim Young-guen, director of Ministry of Commerce, Industry and Energy of the Republic of Korea, Mary Ainger, senior Information Analyst at Northern Trust Corporation, and Robert LeFleur, chief Investment Strategies at Northern Trust Corporation, gave the keynote speeches. Other panelists were Professor David E. Altig, adjunct professor of Economics at the U of C, Francesco Caseli, assistant professor of Economics, and David Hummels, assistant professor of Economics.
Ainger discussed the Japanese economy. [S]He said that lower interest rates and excess capacity are not viable solutions for Japan.
According to LeFleur, Asia has had to contend with new factors which affect its prosperity. He discussed new competition, deteriorating trade bubbles, excess capacity and over-leveraged debt.
LeFleur stated that the two keys to recovery for East Asian markets were strong economic growth in the U.S. and positive policy responses. According to LeFleur, countries such as Taiwan and Hong Kong will begin to differentiate themselves as players in the global market.
Originally published Tuesday, May 19, 1998
