The two women have the opportunity to meet today at the eleventh Asean Finance Ministers' Meeting in Chiang Mai. Asean central bank governors are also getting together during the two-day event.

Zeti said in Malaysia on Monday that the Asean governors were likely to discuss the current volatility of the foreign exchange market, which is affecting the whole region, as well as future cooperation among Asean central banks.

However, what Tarisa might want to ask Zeti is how the Malaysian central bank made it through the tough period after announcing its unpopular capital controls in 1998, when international pressure became enormous.

It wasn't until several years after 1998 that Malaysia began to receive more positive sentiments from the international community, indicating that perhaps its drastic decisions were correct.

Both women have several things in common. They are the first female chiefs of their respective central banks and both are experienced veterans in their respective organisations.

Tarisa, 58, was appointed governor of the BOT last year after her predecessor, MR Pridiyathorn Devakula, became finance minister. Zeti, 59, became BNM's governor in 2000.

They share another crucial common factor. Shortly after they were appointed, both had to announce controversial capital controls.

Rumour has been rife over the past week that because of damage to the capital market from the BOT's recent 30-per-cent capital-reserve requirement, Tarisa might lose her position.

Zeti, who was then assistant governor of BNM, was celebrating her birthday on August 28, 1998, when she was called to be informed of her appointment as acting governor of the Malaysian central bank - with the first job of imposing controversial capital controls.

A few days later, she introduced a shock series of measures, going against all conventional international practices "to insulate the Malaysian economy from the risks and vulnerabilities of external developments".

On the following day, she delivered another blow to investors by pegging the Malaysian currency, the ringgit, at 3.80 to the US dollar.

Asked this week how she compared Malaysia's 1998 capital controls with those currently in force in Thailand, Zeti responded: "They're incomparable."

"Thailand is facing capital inflows with the currency appreciating, while Malaysia was facing capital outflows with its currency depreciating. What happened was that there was speculation and the funds were already flying out," she said.

At the time, BNM discussed the measures with some market participants, and most responses were negative.

"People did not understand what was going on. They were afraid that the stock market - which was already falling - would fall further," the governor recalled. The Malaysian government believed something needed to be done or the entire country could spiral down, along with its currency.

A source in Malaysia's capital market recalled that the magnitude of pressure on Malaysia from the international community was far greater than that now faced by the Thai central bank.

"In my personal view, Malaysia faced much more pressure than that Thailand is facing," he said. "The situation in Thailand right now does not catch that much attention from the international community, not like Malaysia's capital controls did."

Zeti believes that volatility caused by speculation will be a continuing factor in foreign exchange markets, and she suggests that strengthening economic fundamentals, rebalancing domestic demand and regional cooperation are the answers to global imbalances.

Already, the Asean grouping has agreed to cooperate in order to prevent the full force of any future crisis striking any member country and affecting its economy. It is called the Chiang Mai Initiative, and regional authorities have agreed to a swap arrangement as a pre-emptive approach to future crises.

"In my personal view, there should be another resolution mechanism that helps provide liquidity support [among Asean members]," Zeti said.

While Zeti has survived her crisis of confidence to enjoy a period of much greater stability, no one knows what Tarisa's fate holds.

But Zeti's view on the foreign exchange market suggests that Asian central bankers will be able to avoid the pressures of crisis management only by strengthening their surveillance and uniting when it comes to regional benefit.

Jiwamol Kanoksilp

The Nation

Kuala Lumpur