BEING FIRST HAS advantages: just ask Buzz Aldrin. How many people remember he put his foot on the moon within minutes of Neil Armstrong's 'one small step for man, one giant leap for mankind'? Not many.
The lesson is not lost on currency analyst Callum Henderson, whose latest work bears a dustcover crowing 'Asian Dawn is the first book to examine Asia's remarkable recovery, just as his first work, Asia Falling, was the first book to document and analyse the Asian crisis'.
But being first carries risks. Readers of Henderson's first book might remember its title initially had a question mark tacked on the end. Two years on, that hedge no longer seems necessary - Asia definitely fell, with a thud - and the interrogatory has disappeared. This time around, Henderson, who is now based in London with Citibank but was in Hong Kong with Standard & Poor's MMS when the crisis broke, sticks his neck out a bit more. The purpose of Asian Dawn 'is to enter that dangerous world of prediction', he says. No question mark here: the title clearly suggests that Asia is embarking on a new day.
Readers are not misled into thinking the region is home free, however. As liquidity supplied by the International Monetary Fund and the World Bank is reduced this year and next, Asia faces a turning point. Either it comes to terms with the importance of the rule of law and boosting productivity, or it doesn't. The choice, in Henderson's view, is that stark. 'The sense of impending doom and gloom which prevailed during the height of the crisis has faded, but that is not necessarily a good thing. For one thing, as the patient feels better, he or she sees less reason for more medicine,' he says. 'Many of the key vulnerabilities present in Asia before the crisis of 1997-98 remain in place. Without continued medicine, they could spread virulently once more.'
Several events show how little has changed in Asia's corporate boardrooms, Henderson warns. Daewoo, South Korea's second-largest conglomerate, remains a sick company, wooing first one and then another Western automaker as suitor only to repel each in turn with its still-mountainous debt. Bank Bali in Indonesia and Krung Thai Bank in Thailand provide similarly cautionary tales.
And some of Asia's most strategically important policy makers do not seem up to the tasks at hand. Henderson suggests central bankers in Tokyo and Beijing remain scarred by having previously allowed asset bubbles and inflation to put sustainable growth at risk. This leaves them dangerously hesitant to grow their money supplies.
'The Bank of Japan continues to refuse, somewhat stubbornly, to opt for quantitative monetary easing because this could be inflationary, despite the fact Japan continues to suffer from deflation,' he says. 'The People's Bank of China does not have the option of quantitative easing, in part because this would inevitably put intolerable pressure on the Chinese yuan at a time when the Chinese authorities continue to insist that the stability of the yuan will be maintained at all cost.'
