Bangkok-based Hans Winkelmolen
But it still seems to me that politicians
continue to exert a lot of influence on the
technocrats. The country has a history of
military coups; that's the kind of business
as usual.
J<laas-Evert:That's the Thai version of
^political stability.
Hans: But what we see now is major
support from the military for the new
constitution and they put pressure on the
old prime minister, who was an army man
himself, to resign.
Klaas-Evert: Is this opportunistic? The
military is being fed by a growing economy
and has a vested interest in regaining
stability.
Chris:That's one thing all our countries
have in common - all have groups with
vested interests.
Lai: 1 think the Thais are becoming a lot
more politically aware, exerting a lot more
influence.
Chris:That's very different from Indonesia.
Compared to us, Thailand looks 21 st
century. They are much farther along the
•evelopment curve.
laas-Evert: And the Thais have a free flow
of information, a relatively free press, so
people really know what's happening.
WNS:So what about Malaysia?
Klaas-Evert: As Chris stressed, each country
is totally different. We are all effected by
the crisis. But because the rest of the world
looks at Asia as a whole rather than
recognizing the distinct differences, they
don't just decide to get out of one troubled
country, they decide to get out of 'Asia' -
wherever that may be.
Chris: Vietnam is the exception, but there is
certainly a lot of short, hot money floating
in and out, mostly out these days. The
stock-market in Jakarta alone took a 70,
that's seven-zero - beating and Bangkok
and Kuala Lumpur are not much better off.
Klaas-Evert: Kuala Lumpur lost at least 50
percent in dollar ternts. Before the crisis,
foreign participation was about 25
percent, now it is less than 10.
Government statements on increased
regulation of the free flow of capital and
reduced liberalization of markets didn't
13
round table
help, of course. On the other hand, these
markets are small, they are new, and
therefore they are sensitive to big in- and
outflows of funds. They can't cope with
that yet. Actually, even very mature
economies can't ahvays cope with it.
Chris: You then get a stampede.
Klaas-Evert: That's right. The big difference
between Indonesia, Thailand and Malaysia
is that it is unlikely we'11 have a bill to pay
afterwards. There is no World Bank or
IMF money flowing in, what we're seeing
here is more an evaporation of local
liquidity. And so far the Malaysians have
been able to cope with it alone without
foreign support. The reason why they
don't need that support so far is that the
monetary control is very, very strict in
Malaysia.
Chris: That's proving a major asset for you.
In Indonesia, losses will be primarily in the
private sector. We're looking at a scenario
whereby total borrowings are around USD
60 billion, no more than around 30
percent is hedged. Well, you can do the
math on that. Add to that USD 50 billion
in public debt.
Hans: In Thailand we had USD 90 billion.
Chris: You're right about Malaysia paying
the bill domestically. Indonesia did not dip
into its own funds to support the rupiah.
The reason Thailand is hurting so much is
because they supported the baht too long.
The stand-by funds they are using now are
to allow corporates to buy dollars at a
reasonable rate so they can repay foreign
debt. So what happens is that to a large
extent govemment debt increases against a
rapidly decreasing corporate debt. The
question then is, and that brings us to the
bank, what does that mean for my loan
book. What does it mean for the corporates.
It is no secret that some are in deep, deep
manure. At the same time, a number of
other companies, primarily the exporters,
are doing extremely well, with income
shooting up by 50 percent. We run a rupiah
balance sheet with dollar assets, and our
asset base has increased by 40 percent even
though we haven't done a single deal in the
last few months. The irony is that I'm
penalized by the central bank for growing
too rapidly.
Klaas-Evert: All governments know how to
collect money.
Lai: But it also means vast opportunities.
Chris: Margins are so wide you can send an
elephant through them. All of a sudden
corporates are extremely interested in
hedging, interest-rate margins are shooting
up.
WNS: Is this a kind of enforced
sophistication?
Hans: Absolutely.
Chris: When we submitted our revised
budgets, the numbers came in at 50 percent
higher than forecast. I looked at it every
which way, but it was right; I couldn't do
anything about it. We earn dollars, we
have rupiah costs, margins are widening -
mind you, that is before credit provisions.
It all depends on whether we can support
our customers through this.
WNS: The bank prides itself on sticking
with their clients for as long as it is viable.
Chris: I think we've all seen - and our
clients as well - that Rabobank definitely
puts its money where its ntouth is.
Klaas-Evert: We're all looking at
restructuring packages for our clients.
Chris: We have very senior management
here on fact-finding missions so that they
have more sense of what is happening.
We have identified clients who need
restructuring and who will survive. I
think everyone here will agree we've had
a lot of support, especially from Utrecht.
Hans: And don't you think that a lot of
people seem to be seeing this in terms of
opportunities, rather than crisis?
Chris: Absolutely, we're working with
Singapore and Indonesia to identify the
needs of existing clients and to look
more closely at the market for
opportunities with customers we'd like
to work with.
Klaas-Evert: I think there's been a major
change in the last few years in
Rabobank. We're maturing. I think
today's situation is not even comparable
to earlier scares. And the bank is
reacting proactively.
Chris:There's no knee-jerking. That's
Vietnam's Lai Chong Tuk
very valuable. The Korean situation has
changed things, but I still believe that there
will be no need for a moratorium in the
countries we're working in. That means
there are great opportunities, not only for
the commercial bankers but also for our
investment banking people. The question
is: are we willing to take up the challenge?
