Returning to the example of Thailand, whatever the theory, the Thai government set about in a decidedly practical fashion to follow the IMF polic prescription to the letter. Taxes were raised and spending programmes were savaged. Shortly after the initial devaluation of the baht, the Thai government increased the ceiling for foreign ownership in Thai corporations from 2S to 10000. Along with the fiscal strait jacket which it applied, the Thai authorities, albeit with some reluctance, closed down 56 finance companies which had found themselves over-exposed to the domestic property sector in the wake of the asset market crash which took place before and after the devaluation of the bout. Subsequently, the authorities allowed foreigners to own a majority stake in the 56 finance companies - if anyone wanted to
There can be no question that the Thai authorities applied the terms of their bailout package with the IMF most rigorously and fully. Indeed, such was the determination of Thailand to take the medicine given to it, however bitter, that it did not shirk the cost, and the cost was high. Indeed, in addition to the middle classes and Northern peasants demonstrating in the streets of Bangkok, in addition to what one commentator called the decapitation” of the Thai middle classes, the bankruptcies, the hundreds of thousands who lost their jobs and were forced into poverty, it cost the very existence of the Thai government itself. New coalitions were formed and once the presence of the Chavalit government had been removed, Chuan
Leepkai of the Democrats returned to power. This caused jubilation and hope among offshore markets, though some investors with long memories would recall that it was the same Chuan Leepkai who as part of his programme of financial liberalisation created the BIBF, the well-spring of so much of the short-term dollar debt and therefore of the resulting financial chaos in the first place.
Still, with Thai asset markets seemingly being priced at bargain- basement value, one or two foreign investors started to return, started to sift through the rubble of shattered balance sheets for occasional gems. Thailand saw a contraction in 1997 of -1.3 only for this to increase dramatically to -9.4 in 1998 as the initial government programme of fiscal rationalisation and monetary tightening added to the collapse in domestic demand resulting from the currency devaluation. As a consequence, the external gap was more than closed, indeed Thailand produced substantial trade and current account surpluses for 1998. The cost of that was the domestic economy, but in large part that was precisely the aim of the IMF programme. The domestic economy had to bear the brunt of the adjustment in order for the current account deficit to be reduced and ultimately eliminated. At the macroeconomic level, that swing in the Thai current account balance to a surplus of 12.8 of GDP in 1998 from a deficit of -2.1 in 1997 and -7.9 in 1996 represented a healthy improvement in medium-term fundamentals, albeit at the expense, temporarily of the domestic consumer. Left at that, things would have been fine. The economy would have gradually recovered by itself. Yet, the degree of current account surplus in 1998 and equally the degree of economic growth contraction betrayed deeper ills that might otherwise be solved by such general, sweeping macroeconomic measures. At the microeconomic level, the deterioration of the Thai balit and the consequent revaluation of dollar debts had eviscerated most Thai corporate and banking balance sheets, bringing low even renowned Thai conglomerates or at the very least burdening them with massive foreign exchange losses.
With the Thai banking system saddled with bad debts of 400o of total and rising, local banks were neither able nor willing to lend to the corporate base or to consumers. Instead, they sought first to seek to repair their own shattered balance sheets by buying up every long- dated government bond issue they could find at auction and in turn borrowing the funds for those purchases from the bank of Thailand through its repo window, thus making the spread between those two interest rates. The fiscal side was being tightened, interest rates were being kept high in order to support the weakened currency and in addition banks were showing no willingness to lend whatsoever.
From a financial crisis, Thailand had been thrown into a deep economic recession, verging on outright depression. Meanwhile, if it were possible, the situation in Indonesia was even worse.
ไม่มีความคิดเห็น:
แสดงความคิดเห็น