I must confess to having some sympathy for Dr Mahathir Mohamad when he is on the subject of the fickle ways of foreign investors.
I might opt for a different choice of words than the Malaysian prime minister, but he is not all wrong when he blames the troubles of his country and of some of its neighbours on the mercurial moods of outsiders, who may not even have visited the places on which they think themselves such experts.
Yes, it is true that Asia has mostly itself to blame for the troubles it now suffers. Too many projects were undertaken, both in the private and public sectors, with little concern for returns they could generate. The empty office towers of Bangkok offer strong testimony to this fact.
It is also true that national prestige has played too great a role in many investment decisions. The great proofs of the 'Asian Miracle' have proved to be more hubris than miracle. Some humility is now in order.
But who financed these projects? Only last year, foreign bankers were still falling over themselves to provide US dollar funding to almost everyone who wanted it. There is growing evidence that they also widely ignored central bank guidelines to restrain the overheating that all their lending threatened to bring.
Look at Indonesia. Until the rupiah finally cracked under the pressure late last summer, the foreigners were happy to connive with Indonesian companies at fooling Bank Indonesia.
It asked them to declare the currency of their loans, but they concocted various tricks to make it appear rupiah lending. The official figures never picked it up and this made the shock all the greater when the truth came out.
