Far Eastern Economic Review
Oct 1, 1998

Business Briefing

By The Numbers:
 Not Enough

By Salil Tripathi

161 Words

Indonesia, South Korea and Thailand -- the three countries in East
Asia that have received International Monetary Fund-led bailout packages
-- have posted positive trade balances in recent months. This has
improved their foreign reserves, but they remain under serious pressure
from short-term foreign debt, which matures within a year, according to
economists at ABN Amro Bank. South Korea's reserves have climbed to $41
billion from $8.9 billion last December. In Thailand, reserves have
risen to $16.9 billion from $3.5 billion in August 1997.

   IMF-led loan programmes have also played an important role in
boosting the three countries' reserves, says Gerard Teo, senior
economist at ABN Amro. But the beefed-up reserves still don't cover the
short-term debt obligations of Thailand or Indonesia, and in the case of
South Korea the cover is barely adequate. That means external assistance
in the form of IMF-led aid packages will remain crucial in preventing a
new balance-of-payments crunch triggered by another crisis of confidence.