Soros alone cannot be blamed for crisis

Mr Soros heeded the warnings and cancelled his visit, which had been aimed at promoting his new book and social development causes. Ironically, his speech on the crisis of global capitalism likely would have struck a sympathetic chord with many of his detractors. Mr Soros has long called for change in the international financial architecture, which he says is biased towards the first world at the expense of developing countries.

No question, hedge funds and currency speculators such as Mr Soros played a role in accelerating the events leading up to historical decision to float the baht in mid-1997. But to lay sole responsibility for the economic crisis on the shoulders of speculators is historical revisionism which ignores the numerous weaknesses and poor decisions made by policymakers and politicians alike before the baht finally fell.

The greatest pressure on the fixed exchange rate came not from foreign speculators but from the numerous Thai companies who saw the writing was on the wall. In 1996, the country posted a triple deficit in its fiscal account, current account and trade account. The slowdown in the economy and exports, a speculative bubble in the property market and the growing cracks in the financial sector all but demanded that something would soon have to give.

Our premier-in waiting, Thaksin Shinawatra, has said in the past that signs of the crisis were plain for all to see, that the basic data available at the time showed the fixed exchange rate was unsustainable and a crisis was looming. In 1997, Mr Thaksin, then a deputy prime minister, stood up in parliament and waved a sheaf of research papers to make this very point as he refuted allegations that he had somehow been tipped off about the top-secret decision to float the baht.

Shin Corp, the telecoms firm founded by Mr Thaksin, was largely unscathed by the drop in the baht due to its fortuitous decision to hedge its foreign currency risks before the float. Thousands of other companies were not so cautious in their risk management, and their foreign debt jumped sharply as the baht plunged against the US dollar.

No, the real guilt for the economic crisis lies not with foreign speculators and hedge funds, but rather the regulators and economic policymakers who failed to stem the growing rot within the economy in the mid-1990s and address the structural weaknesses which led to the country's deteriorating competitive position in global markets.

Mr Soros did not force the technocrats at the Bank of Thailand to gamble tens of billions of dollars to defend an indefensible exchange rate system. He did not press government leaders to draft budgets funnelling billions of baht into various pockets, or to spend lavishly on mega-projects wildly out of touch with more pressing social, educational and health needs. He did not spur banks to lend recklessly to fuel a land boom, encourage the middle class to bet their retirement funds on an overheated stock market or borrow lavishly to buy expensive French wines, Swiss watches or German luxury sedans.

No, Mr Soros was not the root cause of the crisis but rather a messenger, a wake-up call for Thailand that our house was in dire need of cleaning and that reforms and change were needed. To pretend otherwise is ill-advised denial of reality which threatens to waste the lessons learned at the painful expense of the public.