Hong Kong author leads way in examining region's financial fall

CALLUM Henderson's newly published tome marks the start of what could become a deluge of books penned to explain the Asian financial crisis.

Hong Kong seems particularly adept at spawning financial writers, and it does seem a coincidence the region's economic journey has been bracketed by two books with echoing titles: Jim Rohwer's Asia Rising: The Economic Miracle in East and Southeast Asia and Why the West Will Profit (Touchstone Books, US$14) and, now, Mr Henderson's Asia Falling? Making Sense of the Asian Currency Crisis and Its Aftermath (McGraw-Hill, $19.95 hard, or $12.95 soft).

Mr Henderson, a 33-year-old currency analyst, has the advantage of being the first to bat on this side of the fence, of having access to the inside story and of writing with welcome clarity. He wisely has taken the precaution of tacking a question mark to his title.

Mr Henderson held down a full-time job at research house Standard and Poor's MMS while writing into the wee hours of the morning. Hardly surprising, then, that he begins with an exhausted warning to future authors about book writing being an all-encompassing, soul-destroying task.

In Asia Falling?, Mr Henderson argues the long-term health of Asia's economies possibly has been improved by the forcible snapping of dollar pegs around the region. He says Asia is at a crossroads where it could liberalise its markets or shut its doors, wasting years of progress.

'Fixed, or pegged, exchange-rate regimes, unless flexible enough to allow for the variations in the economic cycle, and unless backed by strong economic fundamentals, inevitably will fail. It may happen sooner, it may happen later, but it will happen eventually,' he writes.