The South East Asia economic crisis revisited

10 years ago we had the Asian tiger economies. Sure there was plenty of poverty but noone noticed. High rise apartment blocks went up everywhere even though no one wanted ‘em. Banks lent money to any big shot in a suit - even if it was for ridiculously risky projects. At stock market analyst meetings in Jakarta, glasses of champagne were handed around as if it were no more expensive than Aqua. Life was good. 

10 years ago less one week Thailand’s forex reserves had been wiped out. Hundreds of thousands of apartments were empty and unsold. The only business being done was by Thai bookers down at Patpong. Beggar’s bowl in hand they – the Thai govt and not the bookers -were soon seeking “help” from the IMF. 

 And as the disease spread, other countries in the region soon became sick: South Korea. The Philippines. Malaysia. And of course Indonesia. Life got bad. Very bad. 

 

--------------------- Today, the region has recovered. And so has Jakarta. The apartment blocks are being built again; their lights left on 24 7 (as they were prior to the 1998 crisis of course: after all, who cares about energy conservation these days anyway?) There are also plenty of new shopping malls, and of course huge new office towers. 

And surely it won’t be long before some business group says it has plans to build the world’s highest building in Jakarta (as happened pre-crisis). As for stocks, well they are continuing to soar of course. The Jakarta Stock Exchange Composite Index is now above the 2,100 level, or an incredible sevenfold increase from a low of around 300 after the economic crisis broke out. 

And stocks will go even higher of course (never mind the fact that the Indonesian market is now more expensive in relative terms to the much less risky US market). Cos we’re on a roll. Heck: even the new investment experts (Chinese housewives up in Kota) are heavy buyers of stocks these days. 3,000 here we come!!