Politics and the IMF in Asia - a recipe for disaster or just a coincidence?

Do you believe in coincidence? Are you the sort of person who has a lucky pair of socks, who always opens a can the same way, sits in the same seat on the bus? Whether you are or you aren't, it certainly seems that some of Asia's market watchers are.

Despite the region's fairly robust economies - combined foreign-exchange reserves are approaching the $3 trillion mark, and most countries are expected to achieve current-account surpluses in the next year - some market players are speculating that disaster is just around the corner.

The recipe for this latest prediction? Take one deposed prime minister add a dash of IMF visitors 'et voila' a veritable souffle of devaluations and meltdowns in the offing. Perplexed? It's not surprising.

Cast your mind back to 1997 and the last time the IMF held its meeting in Asia, just a few weeks after the Thai baht devalued. Most of the 4000 bankers assembled in Hong for the meet were relaxed about the devaluation, dismissing it as a mere shedding of steam by an overvalued Asian currency.

We can look back and mock at how naive they all were. But the power of hindsight is a marvellous (and ultimately useless) tool. Besides, something far stranger and, potentially, more persuasive seems to be bubbling under the surface - the persuasive power of coincidence.

Thailand's economic woes are yet again coinciding with an IMF conference in Asia.The fact that most Asian countries have taken steps to reduce their dependency on short-term foreign capital, one of the major reasons they were so vulnerable in 1997, is in danger of being overlooked in the mesmeric shadow of these two events coinciding once more.

The spin doctors of superstition are also ignoring the fact that Thailand has been in something of a vacuum since Thaksin dissolved parliament in February. And many in the region are adopting a 'wait-and-see' approach to the outcome of the coup. If nerves are being rattled, however, investors will begin demanding a higher premium on other Asian assets.

"The Thai coup is a reminder of fragile political maturity, nothing abnormal but investors need to allow time for these countries to evolve," says V. Anantha-Nageswaran, head of research for Asia and the Middle East at Julius Baer Holding AG in Singapore. "Driving risk premiums too low on emerging-market assets creates conditions for a backlash. Assets in Asia that look most vulnerable are Indian, Indonesian and South Korean equities."

As with so much of life, the real answer will only be apparent after the game has been played. In the meantime is Thailand's political strife the precursor to yet another Asian crisis or just a coincidence? Your thoughts...