[sustran] Asian economic crisis and transport

[Paul Barter]

I am interested to hear the views of sustran-discussers on the implications
for transport of the economic problems that have effected many of the
formerly fast-growing economies in East and Southeast Asia.   Will the
crisis help to bring about a change towards more equitable, people-friendly
and sustainable transport policies? Or will it set back this cause?  Will
any destructive projects that are now on hold just be revived when (if?)
high growth resumes?  Will there be any fundamental rethink of the way
things are done in the region?

Some examples of transport-related impacts that I have heard of include:

* Car sales are plummeting in a number of countries (eg. next year's sales
in Malaysia expected to be 60% lower in 1998 than in 1997).
*  Conspicuous consumption has suddenly become very unpopular.  This is a
big change from attitudes a year ago.  Will expensive cars lose some of
their status value?
* Unfortunately a number of bus companies also have problems. There have
been announcements of cancelled purchases of urban buses in Malaysia.  An
intercity bus company in Malaysia has had 32 of its coaches repossessed by
a finance company in the last few weeks.

A number of mega-projects have been delayed or cancelled:
* The proposed bridge between Indonesia and Malaysia has been deferred
indefinitely.
* Bangkok's  Hopewell expressway/mass transit project contract was
cancelled (with about 20% built).  No new investors so far.
*  Malaysia's Highland Highway,  that is opposed by all major environmental
groups in the country, has been deferred.
* A large number of toll-highways have been completed in Malaysia in the
last two-years or are due to open over the next two years. There are now
doubts about toll-revenue projections and hence the short-term health of
the companies involved may be at risk.

Fuel prices:
*  Indonesia is to phase out gasoline subsidies (by April I think) at the
urging of the IMF.  Diesel and kerosene subsidies (which effect the poor
most) will be less effected.  While gasoline subsidies are probably a bad
idea, many fear social unrest because of the timing and speed with which
they are to be removed in Indonesia just when people have already seen
their buying power plummet. Would a more gradual phase-out be safer?
*  Have Thailand, Korea and the Philippines (which import most of their
oil) allowed their fuel prices to rise in local currency terms to reflect
the international US$ price??  If not, then who is paying for this?
Certainly Malaysia (an oil exporter) has NOT allowed fuel prices to rise.
Presumably this means that fuel in Malaysia is now heavily subsidised (in
the sense that the country must be forgoing income on oil that could be
exported at a higher price)?


It is widely thought that a lack of transparency in decision-making and
accounting procedures has hampered the rebuilding of investor confidence.
Therefore there is great pressure on Asian governments and corporate
conglomerates (eg Korea's chaebols) to become more transparent:
* Indonesia has announced that preferential treatment for the national car
project (the Timur) has been cancelled.
* Malaysia is considering reversing its long-standing practice of using
(secretly) "negotiated tenders" for awarding privatised infrastructure
projects (such as toll-roads and mass transit systems). Negotiated tenders
have been criticised because of the suspicion that they encourage cronyism
and the feather-bedding of contracts. The public works minister himself has
called for a switch to the open tender method.  Such a change might provide
a better chance for public scrutiny of project proposals.


Any responses?   Please correct any  mistakes or omissions that I might
have made.

Paul.