<nettime> Blaming Soros, the Burmese currency crisis

[Pit Schultz <pit@contrib.de>]

[ far away from old europe the latest Soros gossip takes off, new forms of
political-economoical control or right wing conspiracy? comments are welcome!
if you want to start a thread on it please reply to
deep_europe@workspace.icf.de
or go to news://www.icf.de/workspace.deep_europe ]

Subject:      The BurmaNet News: July 27, 1997
From:         strider@igc.apc.org
Date:         1997/07/28
Newsgroups:   soc.culture.burma

The BurmaNet News: July 27, 1997        
Issue #782

[...]

******************************************************************************

MAHATHIR AND SOROS: CURRENCY CRISIS AND POLITICAL 
AGENDAS
excerpts from articles over the past five days

from: THE KATHMANDU POST: "MALAYSIA LEADER MAKES THINLY 
VEILED ATTACKED ON SOROS FOR CURRENCY CRISIS"  
July 22, 1997

Kuala Lumpur, July 22(AFP)- Malaysian Prime Minister Mahathir 
Mohamad made a thinly veiled attack published Tuesday on US financier 
George Soros, blaming him for Southeast Asia’s currency turmoil.

Without identifying anyone, Mahathir accused a foreign financier of 
upsetting currencies to pursue his own political agenda. Soros was clearly 
the target. 

Reports carried by Malaysian newspaper said the financier responsible for 
attacking the currencies was opposed to Burma joining the Association of 
Southeast Asian Nations(ASEAN). 

The report said Mahathir made the remarks to a business group in the Japanese 
city of Okayama on Monday. "We feel that there is some other agenda apart 
from making money. As you may have noticed ASEAN countries are
the targets," he was quoted as saying by Business Times. Mahathir said
targets 
were Thailand, Indonesia, the Philippines and Malaysia.

"We ask ourselves is it just speculation to make money or is it something
else? 
We feel that there is some other agenda, especially by this particular
person who is the patron of a foundation," Mahathir said.

"If they want to attack the British pound, by all means do so. Britain is
rich. 
Malaysia is poor country and it is not right for people like these to play
and 
speculate with our currency," he was quoted as saying. Soros, widely blamed 
for forcing the pound out of European Exchange Rate Mechanism in 1992, 
called in January for an international tourist boycott of Burma and an end 
to investment there by oil companies.

"Every citizen of the world should abstain from travelling to Burma as a
tourist.  The use of forced labour has made it possible for the military
regime
to fix up tourist attractions and build new hotels," Soros said.  Soros
heads a 
foundation for an "open society" which aims to promote democracy and 
which provides financial aid for several countries, notably in central and 
eastern Europe.

Mahathir refused to named the financier but the New Straits Times said he 
was "known to have tried to have used his financial clout in the United
Sates to block Burma's entry into ASEAN, due on Wednesday. Business Times
added
that the prime minister “would not rule out the possibility that this
foundation
is against ASEAN's decision to admit Burma and is therefore putting
pressure on
the currencies of the grouping's members in the hope of undermining their
economies."
----------------------------------

from: THE NATION: SOROS DENIED CURRENCY 'RETALIATION'
July 24, 1997
AP-Dow Jones

KUALA LUMPUR - Billionaire George Soros, well' known for his 
speculative plays in global currency markets, denies that his philanthropic 
foundation and currency speculation business are linked in an attack on 
Southeast Asian currencies in retaliation for Burma's admission into the 
region's trade group.

Soros said through a spokesman that his Soros Foundations and Open 
Society Institute, philanthropic groups that have sought to promote 
democratic government in Burma and elsewhere, are distinct from Soros 
Fund Management, his investment group.

"There is absolutely no connection," said Shawn Pattison, a Soros 
spokesman at his offices in New York.

The Open Society Institute finances the Burma Project, a 3-year-old
operation that seeks to publicise human-rights abuses in Burma and 
support opposition groups.

"I can see how the misunderstanding may have arisen here as Mr. Soros has
been quite vocal in his urging the governments of Thailand and Malaysia 
not to admit Burma into ASEAN," Pattison said. "He continues to consider
totalitarian repressive regimes threats to the region's prosperity and
stability."
--------------------------------

>From VOA: SOROS DENIAL
July 23, 1997
by Dan Robinson

In a public statement, and later in a VOA interview, Mr. Soros says there is 
absolutely no connection between his philanthropic ªOpen Society Instituteª 
-- or its ªBurma Projectª -- and trading by Soros Fund Management:

 “They are two entirely separate organizations.  Soros Fund Management is 
there to make money for its shareholders, and it would not allow itself to be 
influenced by my political views. so there is no connection between anything 
the fund management does, and my concern about the political situation in 
Burma.”

In recent weeks, the devaluation of the Thai currency (ªbahtª) set off what 
market experts described as a domino effect.  Currencies in Malaysia, 
Indonesia and the Philippines lost value.  Burma’s currency -- the ªkyatª 
(pron: chat) -- fell sharply producing what some observers describe as a 
dangerous economic situation.

Although Mr. Soros denies using his financial clout to make a political
point, 
he makes clear his disagreement with ASEAN over its admission of Burma, and 
his feelings about Burma’s military government -- called the State Law and 
Order Restoration Council (SLORC):

 “SLORC is running an economic regime which is a disaster for Burma.  It 
has practically no currency reserves.  You have a totally artificial value
for 
the currency which gives you a chance to favor your people to the detriment 
of the general population.  Because anybody who has permission to, let’s say, 
buy gasoline at the official price can re-sell it and make a living on it.
So it’s a totally corrupt regime.”

Mr. Soros says his fund management organization has no direct investments 
in Burma, and he says he urges companies in which Soros is a shareholder 
to withdraw.  He mentioned that one company -- Newmont Mining of Denver
 -- had recently done so.
  
Soros had eight-million shares in Newmont, worth about 300 million 
dollars.  A spokesman for the company said its withdrawal was mainly for 
economic reasons, but acknowledged Mr. Soros’ views on Burma had been 
a factor.

As for ASEAN, Mr. Soros says the organization will, in his words, have to 
“live with its conscience” after having admitted Burma.  Burma in ASEAN, 
he says, is harmful for the region and for the interests of the ASEAN
countries. 
---------------------------------

from: THE ECONOMIC TIME: SOROS BLAMED FOR SHAKEUP IN SE
ASIA CURRENCIES  (from India)
July 27, 1997

US financier George Soros was accused today of destabilizing South East
Asian currencies for political motives, as governments in the region
resolved to fight-back against speculation in their money.
 
"Today, I'm conforming that Gorge Soros is the man that I was talking
about, " Mr. Mahathir said today, after nearly a week of calling currency
speculators " rogues", "robbers", "anarchists" and "brigands".
 
Mr. Soros had admitted that he did not want Malaysia and Thailand to allow
Burma, which he regarded a "totalitarian and repressive regime", into
ASEAN, the New Straits Times said.
 
"However, I do not believe that the cause of freedom in Myanmar would be
advanced by linking it to currency speculation," he was quoted as saying.
 
Mr. Mahathir said today he was not convinced by the claim. "It is very
difficult to separate the right hand and the left hand and sometimes you
don't even know what your right hand is doing. But in this case, it is
quite obvious there is a convergence," he said.
 
"We have worked 20 to 40 years to develop our countries to this level and
along comes the man with a few billion US dollars and within a period of
two weeks, he has undone almost the work we have done," Mahathir said.
"Who is helping who...I would like to know that."
 
************************************************

BURMESE CURRENCY COLLAPSE, RUMORS OF DEMONITIZATION
(3 stories)

THAILAND TIMES: BURMA'S SLORC WARNS OF RUMOR MONGERS 
OUT TO DISRUPT FINANCIAL, ECONOMIC SYSTEM
July 26, 1997
AFP

RANGOON: Burma's powerful military intelligence chief charged
that "unscrupulous persons" had set out to destroy the country's
financial and economic system, the official press reported yesterday.
     
These persons were spreading rumors that Burma's financial system
would be revamped, and that the country would suffer setbacks as
a newly-inducted member of the Association of Southeast Asian
Nations (ASEAN), said Lieutenant General Khin Nyunt.
     
They were spreading the rumours to cause "monetary instability,
public panic, economic upheaval and fluctuation of, commodity
prices," he said.

Khin Nyunt, first secretary of the ruling junta, the State Law
and Order Restoration Council (SLORC), was speaking Thursday to
1,500 school teachers attending a training course north of
Rangoon, the New Light of Myanmar reported.

The comments follow a sharp depreciation in the value of the
Burmese currency, the kyat, amid concerns that the country 's
foreign reserves have dwindled rapidly over the past year

There has been widespread speculation here of a change in Burma's
monetary system as the military state enters ASEAN and that
dollar foreign exchange certificates would be withdrawn from circulation.
     
Khin Nyunt exhorted the teachers to instill good discipline among
students and warned that "traitors" backed by "western powers"
were still striving to undermine the government. 
     
"They make these attempts knowing these would have adverse
effects on the people they would do whatever that would lead them
to power or whatever that would topple the SLORC government," he
said. 
     
High schools and universities in Burma remain closed after
student unrest late last year and teachers have been sent on
"refresher courses?' by the military state. 
------------------------------------------------------

NATION: CURRENCY SCARE IN BURMA
July 26, 1997    AP

MANY shopkeepers in the Burmese capital of Rangoon closed their
doors yesterday afternoon as rumours swept the city that the
government had demonetised some banknotes.

The rumour falsely claimed that the government's 1 p.m. newscast
had announced that 500-kyat bills with serial numbers beginning
with the letters AL and AM would be demonetised, said Rangoon
residents contacted by telephone.
     
The report apparently gained credence because of earlier rumours
that there were significant numbers of counterfeit 500-kyat and
200-kyat notes in circulation. 

People also find such rumours credible because in the past the
government has undertaken sudden demonetisations. Such a move in
1987 caused political turmoil that ended the 25-year rule of Gen.
Ne Win and ushered in almost a year of instability that ended
with a September 1988 takeover by the military.
-------------------------------------------------------------------------

[...]

Subject:      The Nation (BKK) editorial:  Soros and currency woes
From:         pillai@mgg.pc.my (M.G.G. Pillai)
Date:         1997/07/26
Message-Id:   <3513@mgg.pc.my>
Newsgroups:   soc.culture.malaysia,jaring.general
[More Headers]


>          The Nation (Bangkok) Editorial
>          Saturday, July 26, 1997
>
>
>          Blaming Soros is no solution to currency woes
>
>          Billionaire speculator and quaint pro-capitalist democracy
>          supporter George Soros does see eye to eye with Malaysian
>          Prime Minister Mahathir Mohamad on one particular issue.
>
>          For years, Mahathir has been a staunch supporter of the
>          besieged Muslims in Bosnia - a country which Soros has aided
>          with his own money from philanthropic foundations. And for
>          that, Mahathir had lauded Soros' magnanimous efforts.
>
>          Not anymore.
>
>          On returning from his two-month sojourn in Europe, Mahathir
>          spoke darkly of a certain ''American financier" who was
>          undermining the economies of Southeast Asian countries by
>          destabilising their currencies. He did not name Soros. But it was
>          clear that he was referring to him.
>
>          Blaming Soros whenever a currency is being raided is not new.
>          What is new, however, is Mahathir's assertion that the current
>          bear run on Southeast Asian currencies is part of a conspiracy
>          by Soros to punish Asean for embracing Burma.
>
>          There is no doubt that Soros was one of the key speculators
>          against the baht, an attack which has since spilled over to other
>          currencies in the region. But while Soros may have led the
>          foray, the real push came from other speculators - institutional
>          investors such as mutual and insurance funds, and
>          non-financial corporations. Some of these speculators are
>          Southeast Asians.
>
>          That's not surprising. For once there is a profit to be made,
>          despite fervent calls for patriotism, few speculators would think
>          twice in partaking in the run on their own country's currency. In
>          this country, we have seen Thais reaping enormous profits
>          from the recent attacks on the baht, and the same is likely to be
>          true for other Southeast Asian countries.
>
>          But if Mahathir thought that Soros would spare poor economies
>          from his forays, he was dead wrong. Currency speculation is
>          never a charitable activity - not even for a philanthropist. It
>          does not profess any political agenda, nor does it differentiate
>          the poor from the rich.
>
>          Mahathir's outburst, however, is a case of sour grapes. It is
>          known that Bank Negara, Malaysia's central bank, often
>          dabbled in currency speculation. A few years ago, it had its
>          hand badly burnt when it was caught short while speculating on
>          the US dollar, resulting in losses running into billions. Surely,
>          Mahathir cannot cry foul when the speculative game is not
>          going his way.
>
>          To blame Soros for the crises sweeping through the currency
>          markets of Southeast Asia is not addressing the real issue.
>
>          When Southeast Asia jumped on the global bandwagon, it
>          should have prepared for the downs as well as the ups.
>          Instead, many have allowed the region's spectacular economic
>          growth to lull them into a false sense of invincibility and
>          security.
>
>          By pegging its currencies, Southeast Asian economies have
>          ensured a certain degree of stability to help lure foreign funds.
>          But such easy money is too often splurged on non-productive
>          property markets and wasteful mega-projects. To add to the
>          woes, billions are squandered through unmitigated corruption.
>          Such excesses are now being ruthlessly punished by the
>          currency market.
>
>          Mahathir is known for his feisty and virulent attacks on the West
>          on everything from incest to human rights. There is a ring of
>          truth to some of his remarks. But often his criticisms are no
>          more than fig-leaves to deflect detractors. One such
>          diversionary remark was his accusation that the West was
>          jealous of Malaysia's economic success, especially when
>          Malaysian companies were chided for their cavalier attitude in
>          other Third World countries.
>
>          His blaming of Soros for Southeast Asia's economic woes is
>          vintage Mahathir. While his far-fetched conspiracy theories may
>          receive a measure of domestic support given his firm grip on
>          the Malaysian media, for the rest of the world he is beginning to
>          sound like an angry old man.
>

[the LaRouche statement is not getting included here... ]

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