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Western Press Review: Yen, Wan, Dollars Dominate World Agenda

  • Don Hill

Prague, 25 November 1997 (RFE/RL) -- The coincidence of an economic tornado spinning globally out of Asia and a previously scheduled gathering of Pacific Rim national leaders in an Asian-Pacific Economic Cooperation (APEC) summit this week in Vancouver, focuses Western Press commentary on the world economy.

CHRISTIAN SCIENCE MONITOR: Clinton Calls Asia's economic woes a few little glitches

The U.S. newspaper Christian Science Monitor predicts editorially today that the tornado will prove to be less virulent than feared -- only a sort of economic natural phenomenon. The newspaper asks: "Who's right?"

And the editorial answers "President Clinton, meeting with his Pacific Rim summit colleagues in Vancouver, called Asia's economic woes a few little glitches in the road. The world news media, ever ready to adopt a cliche that conveys alarm crisply, resurrected domino theory as the metaphor of choice. That conveys a vision of country after country tumbled by its neighbors' economic problems. Over time, Mr. Clinton's view -- although overly casual -- will likely prove correct."

SUEDDEUTSCHE ZEITUNG: Yamaichi Securities is set to cease trading

In an analysis today, Rainer Kohler sums up for the Sueddeutsche Zeitung the latest tortuous twist in the financial storm -- the enormous, thunderous collapse of a Japanese financial colossus. Kohler writes: "Yamaichi Securities is set to cease trading -- owing its creditors an estimated (tens of) thousands millions dollars. Japanese taxpayers will be required to bleed for its demise, and to do so more than ever before in peacetime.

"The only solution mooted so far would appear to be a concerted salvage bid by financial institutions and the state, with the leading role being played by the state. One idea is an interest-free bridging loan from the Bank of Japan, presumably a loan that will be never be repaid, symbolically topped up by the banks' credit insurance scheme."

WASHINGTON POST: Now it seems that market forces are too strong for even the world's second-largest economy to channel or control

The Washington Post editorializes today that the sound of the Yamaichi fall may be actually the first screech of the halting of the whole national business system long called "Japan, Inc." The newspaper says: "When the chairman of the failing Yamaichi securities company yesterday tearfully appealed to other companies to hire his 7,500 soon-to-be unemployed staff, he might have been weeping for Japan Inc. itself. Japan's largest corporate failure ever is a clear sign that the old -- and for so many years wildly successful -- way of doing business no longer applies."

The Post says: "A system that let no one go under also worked against anyone's soaring ahead; small business startups and entrepreneurship could not flourish."

The editorial says that reform had been coming, but at a deliberate pace. It adds: "Now it seems that deregulation may proceed at its own pace -- that market forces, the demands of international investors, are too strong for even the world's second-largest economy to channel or control."

It concludes: "If the old ties really are crumbling, and Japanese regulators really are prepared to expose hidden loans and hidden losses, investor confidence in Japan could be restored. But the extent of those hidden losses among other Japanese banks and brokers remains unclear. Honesty is the right and long-postponed policy, but it may reveal some ugly truths along the road to economic restructuring."

NEW YORK TIMES: The economic problems in Asia could also send a signal to the world's other big emerging markets

The New York Times says today in an editorial that an overriding lesson for other countries is the need, above all, for candor in the marketplace. The newspaper says: "As President Clinton meets with leaders of the Asia-Pacific rim in Vancouver this week, financial turmoil threatens the Asian economic miracle on which their partnership is based. The paradox of the summit meeting, however, is that the bailouts in Thailand, Indonesia and South Korea, not to mention the failure of some big banks and securities firms in Japan, are driving home lessons of fiscal discipline better than the Clinton administration ever could."

It says: "The economic problems in Asia could also send a signal to the world's other big emerging markets." The editorial adds: "Exacting discipline in Asian countries will be painful." And concludes: "The first step for any country toward regaining financial credibility in the world markets is to acknowledge the extent of its problems candidly, to itself and its own people."

FRANKFURTER RUNDSCHAU: The People's Summit has been discussing the forgotten agenda

Writing today in a news analysis in the Frankfurter Rundschau, Gerd Braune describes an alternative gathering in Vancouver -- whose emphasis is on human rights. Braune says: "While government officials and representatives of APEC countries discuss trade liberalization and the international financial crisis, another group is in town discussing the forgotten agenda. It is the People's Summit, and some 1,500 people representing various social, labor and environmental groups in all APEC member countries are taking part."

Braune writes: "Delegates have been discussing since Wednesday such issues as the current and potential effects of global economic liberalization on working conditions, human rights, the environment and indigenous peoples around the world. Human rights is not on the agenda of the APEC summit, even if host Canada, in particular, has promised to raise the issue in bilateral talks with other APEC member governments."

Commentary and analysis also discuss the likely effect of the Asian disturbance on other major economic climates:

TIMES: Firm action in Japan will be accompanied by adequate international financial support

The Times of London, in an editorial -- "There is now an immediate and present danger of Japanese banks facing an end of foreign credit lines. They could then be forced into rapid sales of their huge holdings of U.S. Treasury bonds. (At Vancouver) President Clinton should emphasize that firm action in Japan will be accompanied by adequate international financial support, which again will involve Tokyo -- for Asian governments' efforts to clean house."

LOS ANGELES TIMES: Will China be next?

The Los Angeles Times in a news analysis by Rone Tempest says -- "As Asia's once-booming economies continue to stagger and slide, one big question remains to be answered: Will China be next? At first glance, economists mostly agree, China's swelling economy has many of the same symptoms that have brought other Asian economies to their knees, including an overvalued currency, heavy external debt and a weak banking system. Yet China has not yet gone the way of Thailand, Malaysia, Indonesia and South Korea."

JOURNAL OF COMMERCE: Mr. Chubais, most responsible for Russia's economic transformation, was stripped of much of his power

The U.S. newspaper Journal of Commerce, in an editorial: "Asia's financial tremors have rocked world markets, but an earthquake of a different sort hit Russia last week. The man most responsible for Russia's economic transformation -- no, not Boris Yeltsin -- was stripped of much of his power. Indeed, Anatoly Chubais, Russia's boldest reformer, may be on his way out of the government entirely." (Investor) confidence in Russia has never been high, but what little there is can be traced to Mr. Chubais. (He) was replaced as finance chief by a respected member of Russia's Parliament and a bona fide reformer, Mikhail Zadornov. Under the circumstances, it was the best choice Mr. Yeltsin could have made. Still, Mr. Chubais is unique in his ability to get things done. If he is eventually forced out, it would unnerve Russia's markets and send some -- perhaps many -- investors packing."