Financier rejects 'Asian values'

CREDIT Suisse First Boston (CSFB) vice-chairman Richard Holbrooke yesterday rejected the concept of Asian values, saying the notion had been used as a front to conceal dubious business practices which had contributed to the regional crisis.

Mr Holbrooke said if the so-called value system was allowed to flourish unchanged as Asia recovered, the region would again face the threat of social upheaval and economic dislocation.

"Behind the rhetoric of Asian values lay, and still lies, a smokescreen designed to obscure balance sheets that won't stand scrutiny, something called crony capitalism as a way of doing business," he said.

Mr Holbrooke, former US assistant secretary of state for European and Canadian affairs, is in charge of developing CSFB's Asian investment banking business.

"I do not accept the theory that there is something unique called Asian values, and these Asian values justify a double standard in the way that business was done," he told the firm's Asian Investment Conference which included executives from many of the region's leading companies.

"What were these famous Asian values? Strong family structures, a Confucian education system and hard work . . . Those aren't Asian values, those are universal values," he said.

Mr Holbrooke - known for his blunt talking style when forging the Dayton accord that helped to end the Bosnian conflict - said Asia had no choice but to reform its economies, boosting standards of corporate governance and transparency.

"The Asian economies will have to play by the same rules as the rest of the world. This is the only fair way to do things," he said, adding that he wanted to deliver "a strong warning that next time out it cannot be business as usual".

He said corruption existed in the United States but it was regarded differently and when uncovered, dealt with far more severely than in Asia.

"To be sure, there is corruption and a Western version of crony capitalism in the United States and Europe as well, we grant that. Except that when it's uncovered, when it is exposed, it is not condoned and it is not justified on the grounds of some rhetoric."

He said the region's chances of recovery were strong if International Monetary Fund directives were adhered to, adding that countries would pull out of their difficulties in the next two to five years.

The pace of recovery would depend on the quality of political leadership offered by each country's government.

While the situations in South Korea, the Philippines and Thailand were gradually improving, Indonesia was much further behind.

"Let me be clear that the United States is working overtime with the Indonesian government and the IMF to assist them in digging their way out of this horrendous situation that they are in," he said.

Republican congressional leaders, including Senator Jesse Helms, were criticised for handicapping the Clinton Administration's Asia policy, in part through their linking of abortion issues with funding requests for the IMF.

"A 25-year era in Asia is over," he said. "Asian culture, of course, . . . is undeniable. But Asian values - a much over-used phrase - was really a smokescreen for something else. And it must not be allowed to to come back."

 Published in the South China Morning Post. Mar 28, 1998