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Soros, Puey have little in common except school ti


Between George Soros and fellow London School of Economics and Political Science graduate Dr Puey Ungphakorn, there lies a huge chasm report Thanong Khanthong and Wichit Chaitrong.


A Thai diplomat working at the United Nations in New York recently bumped into George Soros, the legendary currency raider. Their conversation, of course, centred on the ailing Thai economy and how Soros made money on it in the old-fashioned way.

Soros told the official that a student of the Thai economy should have realised six or seven months ago that eventually the government had to devalue the baht. He admitted to have speculated against the baht in the foreign exchange swap market, losing some money in the first round but making profits later.

Soros expressed sympathy for the state of the economy and the Thai people, so he had refrained from making any public criticism of this country's economic management.

''But I would not have been able to speculate against the baht if the Thai economy or financial system was not in such bad shape," Soros was heard saying.

Soros did not sound like a Western devil that some Asian leaders would like to portray him as, yet he is not that kind-hearted either because he makes money by mowing down economies. It is a matter of judgemental values how you describe Soros. By Western standards, Soros, of course, stands at the pinnacle of capitalist-driven success.

Hailed by Time magazine as one of America's most influential personalities in 1997, Soros last year alone donated a handsome US$350 million to charity, making him a de-facto leading philanthropist. Furthermore, he is president of Soros Fund Management and chief investment officer of Quantum Fund NV, a $12-billion international investment fund with a spectacular growth record in its 25 years.

Western critics do not hesitate to defend Soros and rejected a conspiracy theory that American-based hedge fund managers were behind the currency woes in Southeast Asia.

Nicholas Burns, US State Department spokesman, said, ''George Soros is a highly respected individual in the United States who has done a lot of good things for many countries around the world, specifically in central Europe."

Wrote George Melloan, a columnist for The Wall Street Journal: ''Mr Soros is a cop. When he spots a nation guilty of financial mismanagement, he is apt to go after that country's currency. If other short-sellers join the chase, a hapless central banker will be run into the ground."

The Bank of Thailand was run into the ground, so were other regional central banks after Soros opened up old wounds inflicted by years of blatant macro-economic mismanagement. A full-scale currency attack from the Western hedge-fund managers was not something the policy makers in this region expected after they had opened up their economies to globalisation.

Somewhere out there in the gigantic $1.5 trillion a day global currency markets, speculators cunningly lurk around the clock for any signs of weakness in currencies and then mount attacks for quick profit. It is purely a money game.

Casting his big shadow over the regional currency markets, Soros has skinned off the Asian Tigers' stripes. And some of them growled back at him angrily.

Malaysian Prime Minister Mahathir Mohamad held Soros up for contempt, calling him the culprit behind the regional turbulences and writing off Soros' charitable heart.

''It's very difficult to separate the left hand from the right," Mahathir said. ''I think it is very difficult to have a split personality, unless he is schizophrenic or something like that. It's quite obvious that there is a connection. We have worked for years to develop our countries to this level. Along comes a man with a few billion dollars and in a period of two weeks he has undone most of the work we have done."

Thai leaders are not eloquent enough to go after Soros in the open, neither is it a Thai trait to trade verbal charges. From the Thai perspective, according to Somkiat Osotsapa, associate professor at the Chulalongkorn University's Faculty of Economics, the best way to understand Soros is to compare him with Puey Ungphakorn, the towering figure who was responsible for building up the modern Thai macro-economy. Both Soros and Puey went to the London School of Economics and Political Science (LSE).

''They share the common view on economic philosophy in that they don't put all their faith in capitalism. They see the ugly side of capitalism, such as unemployment and underprivileged people," Somkiat said.

The LSE has been the flowering political stronghold for Britain's Labour Party, which is more inclined towards socialist rather than capitalist values. The students who study there are mostly from the lower class, or the lower income family bracket, contrary to those who attend LSE's rival, Cambridge University.

The school's economists tend to have more sympathy with the plight of the poor than their Cambridge counterparts, who have more faith in capitalism. After his return to Thailand, Puey almost single-handedly laid a foundation for the modern economy, reformed the financial markets and build up the Bank of Thailand as the pillar for economic development. Puey also concentrated his work on rural development, using the networks of the central government's mechanism and non-governmental organisations to achieve his goals. To him, economic and social development must go hand-in-hand.

Soros has focused most of his philanthrophical enterprises on Eastern Europe, using profits from his currency speculations. As a Hungarian-born, he has formed a life-long sympathy with the Eastern European case, whose people have been living in shambles under years of socialism and communism.

''Soros has a very good understanding of economics and psychology. He has successfully combined the two disciplines together in his investment strategy, which has enable him to stay ahead of the financial markets," Somkiat said. Both Soros and Dr Puey are not only economists, they are also philosophers who try to apply their knowledge to help the poor."

But there is a big difference between the two men. ''While Puey has an obligation to his motherland, rebuilding it from being a backward country. His whole life has been devoted to the task of nation building," Somkiat said.

''But Soros is a migrant. He has no obligation to any specific country as far as reconstruction is concerned."



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