The Ladies Who Lunch (Not)

The headline is a popular song from one of my beloved musical Company. It targets the ladies who lunch in luxury, driving their Beemers and Mercs with just their fingertips on the wheel cause they do not want to mess up their manicured and freshly painted nails.

With that as a backdrop, this week I would like to highlight 3 women in this region who literally manage the “purse strings” of Malaysia, Thailand and Indonesia.

Tarisa Watanagase (Governor, Bank of Thailand)

Tarisa is the country’s first female governor in the bank’s 64 year history. She joined the central bank in 1975 and was appointed deputy governor in 1992.

She graduated B.E. and M.E. from Keio University in 1973 and 1975 respectively. She was also honoured with the Honorary PhD from Keio University in 2007.

Tarisa holds an actual doctoral degree in economics from Washington University. She has experience in almost every key department including monetary policy, money market, supervision and payment systems.

In addition, she was also an economist at the IMF from 1988 to 1990.

Tarisa was appointed as governor of Thailand’s central bank in 2006 following the military coup which ousted Thaksin. She has never had it easy and has had to fight tooth and nail to maintain her independence and assert her policy making.

She was gung-ho enough to impose capital controls on foreign equity, bond and currency trades but maybe a bit over-cautious on the influx of foreign capital into the country. Still, it’s understandable in the light of averting a repeat of the 1997 crisis.

Her unpopular moves were questioned and debated by fellow ministers, the opposition and was fodder for discussions in coffee halls. And while her unconventional ways have won her admirers, she has drawn plenty of detractors, who have also raised concerns over the central bank’s independence.

Such concerns were further ignited following several new appointments and powers that were granted to the central bank’s 12 member board. More than half of the appointees were bureaucrats from the Finance Ministry. while BOT-recommended candidates were seemingly pushed aside.

Her leadership is constantly under fire, particularly in relation to the negative real interest rate environment. The value of the baht has slid drastically in recent weeks. In defence of her move to impose cap controls, foreign capital inflows would have wreaked havoc on liquidity and sent the baht to over drive.

The imposition of currency and capital controls had sent the shares index plunging 15% causing Tarisa to backtrack the move on equity transactions but keeping the lid on currency and bond trades. Her move, meant to rein back speculation, stands at odds with the government’s to stimulate the economy.

But at the end of the day, the central bank must and should be independent, not to be used as levers by the government.

The objectives of BOT is much broader than that of the government, and the latter should respect that. By ousting Tarisa, the country will be caving in to the whims and fancies of foreign funds and may be perceived as not having the long-term financial health of the economy at heart.

Obviously, Tarisa sees stabilising prices as a higher priority than economic growth, and that has to be respected.

Her tenure was expected to be cut short saved for a timely audience with the highly respected King of Thailand.

Following the meeting, Tarisa has said that she would follow His Majesty’s advice on handling the monetary system for the benefit of the country, adding that she will not be pressured by interferences on the central bank’s policies.

I hope she will stick around for a while. No doubt, it’s a tough job.

Sri Mulyani Indrawati ( Finance Minister, Indonesia)

Suffice to say, Mulyani has made the transition from academia to politics with flying colours.

In 2005, Mulyani, who has a doctorate in economics from the University of Illinois, was appointed Minister of Finance. Prior to that, she was executive director of IMF (representing the 12 countries in Southeast Asia) and had had also served as a consultant with US Ad Agency USAID to strengthen Indonesia’s autonomy.

She has become a big name, having won accolades for her achievements. She was awarded the title `Best Finance Minister in Asia’ by Emerging Markets newspaper in 2006 and named Minister of Finance of the Year (2006) by Euromoney Plc.

Foreign investors regard Mulyani in high esteem and her leadership is seen as critical in driving the country forward. She is constantly pushing for reforms but sadly, they’ve been bogged down by Indonesian bureaucracy. She has also boldly tried to reform the bureaucracy in the tax, customs and excise divisions, generally regarded as the most corrupt wings in the ministry. She has proposed to raise salaries and replace old-hands with fresh professional blood.

She has won the hearts of foreign investors and has wooed significant foreign direct investment into the country.

Undoubtedly, Indonesia has exactly the right person, for the right job and at the right time.

Tan Sri Dr Zeti Akhtar Aziz (Governor, Bank Negara)

Bank Negara has had a chequered history. In the late 80s, Bank Negara under Jaffar Hussein was a major player in the forex market. It was tantamount to speculation by a central bank and that’s not an opinion but a statement of fact. Even Alan Greenspan, the Federal Reserve chairman had requested Bank Negara to stop its eye-brow raising activities.

In 1992, again, Bank Negara was in the forefront, trying to defend the British pound’s value. We know who won that battle (if you don’t, it was George Soros) and Bank Negara lost US$4bil. Zeti became the first female central bank governor when she was appointed to the hot seat in May 2000. She obtained her B.Ec. degree from University of Malaya, followed by a doctoral in monetary and international economics from Wharton School of University of Pennsylvania.

Her dissertation was on capital flows and its implications for monetary policy. She joined the Economics department in Bank Negara in 1985 and in 1994 was appointed as Bank Negara’s chief economist.

In 1995 she was appointed assistant governor. Zeti was the managing director of Danaharta Nasional from 1998 to 2000 and was on the board of Khazanah from 2004 till 2008.

I could go on and on about what she has done right for the country’s financial health following the 1997 financial implosion, but that will take pages. Let’s just look at Bank Negara’s foreign exchange reserves:

July 2004 US$54bil

July 2005 US$78bil

July 2007 US$99bil

March 2008 US$120bil

Banks and finance companies have been restructured, merged and shaped up under her regime.

When the capital controls and currency floating was implemented, Malaysia was bullied and criticised. But the move paid off when Malaysia returned to competitiveness faster than most countries in the region.

The eventual lifting of the RM3.80 peg against the US dollar also showed her discerning powers and confidence in the country’s balance sheet moving forward.

In 2003, Zeti won the praise as Central Banker of the Year by Euromoney Plc for her role in the reform of the exchange rate, the capital markets, and the banking industry. Zeti has also played a pivotal role in driving the growth of Islamic finance and establishing common standards of what can be considered Shari’ah compliant.

In 2002, Zeti headed the team to launch Malaysia’s global Islamic Sukuk, the world’s first Sukuk to be issued by a sovereign.

In my opinion, she has achieved a lot for the country and all this by being apolitical and refusing to play ball with certain factions.

Ladies, I would love to have lunch with you sometime.