Turning point in Far East?

Sark is such a wonderful island. The tranquil atmosphere delivers such a restful frame of mind that you become totally detached from the world. It was not surprising when, after a mere five days, I had forgotten that there had ever been an Asian crisis. Until President Suharto resigned, of course. But does this change at the top really make any difference?

Incoming President Habibie has a reputation for being an economic wild card. In the past he has been responsible for a rather erratic interest- rate policy and for seeking to turn the commodity-based economy of the third most populous nation on earth into something rather more high-tech - not so far successfully achieved. He was also vice-president under Suharto.

It will take a while to gain the measure of the new man, but much will depend on how much he is prepared to co-operate with the IMF. They should really be in the driving seat now, but he may have his own ideas about how Indonesians should manage their way out of their problems. And, of course, we do not know if the civil unrest will now moderate.

It all prompted me to reconsider these markets on the other side of the world. We are approaching the first anniversary of the start of the Asian crisis, with every indication that the story will run and run. Domestic demand in the region remains flat, but this is helping the balance of payments position of these countries. At some stage the major international banks - who arguably were responsible for the collapse when they collectively withdrew their support - will feel more confident and return to the region. Certainly, talking to Alan Butler-Henderson, who used to be ING Baring's man in the Far East, before becoming an independent commentator on the region, thinks that markets like Thailand and Malaysia have fallen to levels that discount all current problems. I hope he is right.

There is some sign that big business is beginning to dip a toe in the water, even if international money managers are still steering well clear. South-east Asia is a long way from being written off.

Of course, Japan remains a focal point. In Mr Butler-Henderson's view, bonds in Tokyo are over-bought and equities over-sold. Interestingly, he thinks that any correction might have implications for other equity markets. When the Japanese regain their confidence, they are likely to bring money back onshore.

What has been interesting about this whole sorry affair is how little impact it has had on the developed stock markets. In practice, the value of share markets in South-east Asia are of relatively little significance, if you exclude Japan. It may still take some time for the situation to fully unwind, but the long-term advantages - large populations, aspiring consumers, a strong work ethic - remain intact.

So far as Indonesia is concerned, they were a lot further behind many parts of the region and the considerable disruption that the events of the past few weeks will have delivered to the economy will not make recovery any easier. It will be a long time before we see them back on an upward path, but maybe the worst is behind them. It looks time to give the region more than just a cursory glance. But widows and orphans should still stay clear.

Brian Tora is chairman of the Greig Middleton Investment Strategy Committee.

Arts & Entertainment
Ricky Gervais at a screening of 'Muppets Most Wanted' in London last month
tvRicky Gervais on the return of 'Derek' – and why he still ignores his critics
Sport
Gareth Bale dribbled from inside his own half and finished calmly late in the final to hand Real a 2-1 win at the Mestalla in Valencia
sport
Life & Style
Infant child breast-feeding with eyes closed
healthTo stop mummy having any more babies, according to scientists
Arts & Entertainment
James Franco and Chris O'Dowd in Of Mice and Men on Broadway
theatreReview: Of Mice and Men, Longacre Theatre
VIDEO
Have you tried new the Independent Digital Edition iPad app?
News
news
Life & Style
Going down: Google's ambition to build an elevator into space isn't likely to be fulfilled any time soon
techTechnology giant’s scientists say there is no material strong enough for a cable from Earth into orbit
Arts & Entertainment
film
Sport
Vito Mannone fails to keep out Samir Nasri's late strike
sportMan City 2 Sunderland 2: Goalkeeping howler allows Man City to scrap a draw – but Premier League title is Liverpool's to lose
News
David Cameron sings a hymn during the enthronement service of The Most Rev Justin Welby as Archbishop of Canterbury, at Canterbury Cathedral last year
news
Life & Style
From long to Jong: Guy Pewsey gets the North Korean leader's look
fashionThe Independent heads to an Ealing hairdressers to try out the North Korean dictator's trademark do
Extras
indybest10 best smartphones
Arts & Entertainment
tvCreator Vince Gilligan sheds light on alternate endings
Life & Style
Google Doodle celebrates the 63rd anniversary of the Peak District National Park
tech
News
Paul Weller, aka the Modfather, performing at last year’s Isle of Wight Festival in Newport
people
Life & Style
Michael Acton Smith founded Firebox straight out of university before creating Moshi Monsters
techHe started out selling silliness with online retailer Firebox, before launching virtual creatures who took the real world by storm
Arts & Entertainment
Don (John Hamm) and Megan (Jessica Paré) Draper are going their separate ways in the final series of ‘Mad Men’
tvReview: The suits are still sharp, but Don Draper has lost his edge
News
Ethical matters: pupils during a philosophy lesson
educationTaunton School's policy of putting philosophy at heart of its curriculum is one of secrets of its success
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs General

    Energy Consultant – Building Management

    up to £45,000 + benefits: The Green Recruitment Company: Our Client The Green ...

    Senior Industrial Energy Consultant

    Up to £45,000 + benefits: The Green Recruitment Company: Our Client The Green ...

    Mechanical Building Services Energy Engineer

    up to £45K basic + benefits: The Green Recruitment Company: Our Client The Gr...

    Building Services Energy Engineer

    up to £45K basic + benefits: The Green Recruitment Company: Our Client The Gr...

    Day In a Page

    Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

    Ricky Gervais: 'People are waiting for me to fail'

    As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
    Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

    Mad Men returns for a final fling

    The suits are still sharp, but Don Draper has lost his edge
    Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

    Google finds a lift into space will never get off the ground

    Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit
    Westminster is awash with tales of young men being sexually harassed - but it's far from being just a problem in politics

    Is sexual harassment a fact of gay life?

    Westminster is awash with tales of young men being sexually harassed - but it's far from being just a problem in politics
    Moshi Monster creator Michael Acton Smith: The man behind a British success story

    Moshi Monster creator Michael Acton Smith

    Acton Smith launched a world of virtual creatures who took the real world by storm
    Kim Jong-un's haircut: The Independent heads to Ealing to try out the dictator's do

    Our journalist tries out Kim Jong-un's haircut

    The North Korean embassy in London complained when M&M Hair Academy used Kim Jong-un's image in the window. Curious, Guy Pewsey heads to the hair salon and surrenders to the clippers
    A History of the First World War in 100 moments: A forgotten naval victory in which even Nature played a part

    A History of the First World War in 100 moments

    A forgotten naval victory in which even Nature played a part
    Vespa rides on with launch of Primavera: Iconic Italian scooter still revving up millions of sales

    Vespa rides on with launch of the Primavera

    The Vespa has been a style icon since the 1950s and the release this month of its latest model confirms it has lost little of its lustre
    Record Store Day: Independent music shops can offer a tempting alternative to downloads

    Record Store Day celebrates independent music shops

    This Saturday sees a host of events around the country to champion the sellers of well-grooved wax
    Taunton's policy of putting philosophy at heart of its curriculum is one of secrets of its success

    Education: Secret of Taunton's success

    Taunton School, in Somerset, is one of the country's leading independent schools, says Richard Garner
    10 best smartphones

    10 best smartphones

    With a number of new smartphones on the market, we round up the best around, including some more established models
    Mickey Arthur: Aussie tells ECB to stick with Ashley Giles

    Mickey Arthur: Aussie tells ECB to stick with Ashley Giles

    The former Australia coach on why England must keep to Plan A, about his shock at their collapse Down Under, why he sent players home from India and the agonies of losing his job
    Homelessness: Why is the supported lodgings lifeline under threat?

    Why is the supported lodgings lifeline under threat?

    Zubairi Sentongo swapped poverty in Uganda for homelessness in Britain. But a YMCA scheme connected him with a couple offering warmth and shelter
    A History of the First World War in 100 Moments: When the world’s biggest shed took over Regent’s Park

    A History of the First World War in 100 Moments

    When the world’s biggest shed took over Regent’s Park
    The pain of IVF

    The pain of IVF

    As an Italian woman vows to keep the babies from someone else’s eggs, Julian Baggini ponders how the reality of childbirth is often messier than the natural ideal