For an event that so dramatically altered the social and economic landscape of Asia, the financial crisis of 1998 has spawned precious little in the way of readable books. Philippe Ries' account of the turmoil, The Asian Storm, can rightfully claim, therefore, to be definitive. Originally published in 1998, the 2000 edition has been updated to include the developments of the past two years. Little of the author's sharp and incisive writing style is lost in the translation, and he does an excellent job of conveying the sense of confusion that rocked the region for months. As an economist and journalist for Agence France-Presse, Ries has a ready understanding of the financial complexities which triggered Asia's downfall. He is able, furthermore, to translate that understanding into a clear, riveting account of the mayhem. By separating the book into chapters which each focus on a different aspect of the crisis, Ries brings order to the bewildering chaos of the period. The second chapter of the book homes in on the fall of Hong Kong securities company Peregrine. Ries has done his research on the investment bank well and succeeds in capturing the friction between the fixed-income and equity departments. That Peregrine fell at all was due, says Ries, to their basic ignorance of well-established banking principles. By lending a third of their capital to an Indonesian taxi company, the investment bank found themselves dragged into the Indonesian meltdown, from which they never recovered. Ries notes that the bank's eventual liquidation was as much down to inadequate strategy as it was to other regional factors. The example of Peregrine serves well to illustrate the problems faced with companies all over Asia. Ries' descriptions of economic turmoil in Japan, Indonesia and Malaysia are particularly illuminating. His description of the conflict between Malaysia's Mahathir Mohamad and American speculator George Soros, that so characterised Malaysia's own descent, is even-handed. The two, believes Ries, were not so different after all and had similar reactions to the crisis. Ultimately, the book serves to display amply the folly of 'crony capitalism'. Significantly, there is much in this book that indicates Asia is by no means clear of the crisis and that some governments and companies appear unwilling to learn the lesson. Ries also excels in describing how economists used the crisis as a way of settling scores. The way in which the Japanese economic model was discredited after the crisis comes in for special attention. The role played by globalisation in hastening the demise of Asian economies is also afforded detailed study. It is in everyone's interest to read this book. By carefully documenting the fallout of the crisis and the tragic panic it engendered, Ries eloquently puts forth the strongest argument yet for the reform of Asia's financial systems. The Asian Storm by Philippe Ries Published by Tuttle
