I would like to share with readers some interesting discussion points from the 23^rd Asia-Pacific Roundtable, which discussed the Global Financial Crisis, the fundamental causes and fundamental remedies.

Central to the discussions seem to be an agreement that the current global crisis is due to a macroeconomic imbalance, and this imbalance has to do with an industrialized West is has consumed too much, and the rest of the world particularly Asia producing too much for the consumption of the West.

And this buying was done through financing, and which sooner or later is bound to catch up with the borrower i.e. the West.

Major holders of FX reserves, US Billions

China 1,528.2

Taiwan 270.3

India 266.6

Korea 262.7

Hong Kong 152.7

The accumulation of huge reserves denominated mainly in US Dollars was made possible by the nature and the structure of the financial markets in its present form.

Major Foreign Holders of US Treasury Securities, US Billions

By 2008 when debt defaults begin to be serious, the impact spread quickly to the whole global finance.

The fall of Lehman Brothers on 15/9/2008 signaled the collapse of the global capital market.

Dr Narongchai Akrasanee who is the Chairman of the Export-Import Bank of Thailand has the remedies to propose;

Rather than continue to invest in the West, Asia should invest more in its own infrastructure, education and health care. This would increase the share of real intra-Asia trade, and reduce the surplus with the West.

As for the global financial system. Asia should support a more regulated regime like the IMF, World Bank and the Asian Development Bank.

AND Asia should be more serious ABOUT THE DEVELOPMENT OF ITS OWN MONEY and capital markets, so that MORE SAVINGS AND INVESTMENTS CAN BE MADE IN ASIA, FOR ASIA.

by Stephen Doss
Gerakan4u.com's Invited Columnist