entitled “ good governance for financial institutions ” on 10 june 2000. there are, therefore, no one - size - fits - all solutions. each country will have to pick up from the experiences of others, and adapt these experiences to their own conditions. each will have to judge for itself the right balance and speed of changes to suit its own needs and circumstances. nobody else has the same stake in the outcome. conclusion the crisis has been a major setback for asean and its member economies. many external observers and investors still consider our economic prospects doubtful, and see asean as an ineffective sunset organisation. these perceptions are political facts which can define political reality. if asean economies do not deliver by way of structural reforms and strong, sustained economic recovery, and north east asia continues to pull ahead, international investors will relegate us to the sidelines, and we will be marginalised. perceptions, however, can be proved wrong. the best answer to them is real action and change. we must strengthen our economies and make ourselves more competitive, while safeguarding ourselves against external shocks. we must press on with economic cooperation among ourselves, and with the rest of the world. and each country must set its own house in order, by creating the political preconditions, restructuring its corporate sector, and reforming its banking system. then the resilience of individual members will result in a strengthened asean as a whole. asean and its members have overcome many difficult challenges over the past three decades. despite the crisis, we are much better off today than we were before the economic take off. the road ahead is indeed difficult. but the ingredients which fuelled our rapid growth in the past are all still there. given the political will and the right policies, i am confident that in time asean will recapture the lost ground, and thrive and prosper into the new century.

be resolved, as cleanly and expeditiously as possible. governments need to step in to push the process through, and in extremis to take over insolvent firms and do the clean - up themselves. clear and enforceable bankruptcy laws are needed to deter prolonged default by debtors, and give creditors incentives to settle. and for the future, there must be more transparency in terms of corporate governance and reporting. for example, thailand passed new bankruptcy and foreclosure laws last year, and i understand has just passed a new accounting act. among other things, the new laws will stipulate minimum qualifications for auditors, and ensure that directors take greater responsibility for the accuracy of financial statements. investors and analysts will view these steps positively, especially if foreclosure cases brought under the new laws and now before the courts are fairly and speedily settled. second, many private sector firms, particularly family - owned companies, need to upgrade and modernise their management. family businesses and conglomerates are a feature of many asian economies. these were built up through the business acumen and drive of their founders, and still account for a sizeable component of the economies. but the world has changed. capability and competence are now at a premium, and relationships count for less. family companies need to segregate clearly ownership rights and management functions, and bring in other significant shareholders and external capital. their challenge is to evolve into modern corporations that are more than family companies. they need to be run professionally by the best man for the job, and not by heirs who may or may not have inherited the business skills and acumen of the founder. third, governments need to untangle the complicated and deeply - entrenched ties between state, banks and industry, which exist in many asian countries, like the chaebols in south korea, or the state - owned enterprises in china. such industries and enterprises often account for a significant share of gdp, but they are neither subject to market discipline, nor driven purely by economic considerations. they often find it difficult to operate as efficiently as private sector firms. banks fail to apply normal criteria in approving loans, because of political pressure or implicit state guarantees. employees enjoy de facto life - time job security. well - connected persons help themselves to privileges at the companies ’ expense. and governments find it politically impossible to close down the operations, no matter how unsuccessful. it is essential to speed up restructuring and reforming these unproductive enterprises