ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

East Asia: A Decade AfterSubscribe to East Asia: A Decade After

Financial Crises, Reserve Accumulation and Capital Flows

The article constructs a theory to understand a financial crisis in an open third world economy in the context of a sequence of stock equilibria, ensured by inelastic expectations. It then explores the predicament of such an economy when it "opens up" to global financial flows. In the absence of central bank intervention it has to face financial crises. But central bank intervention aimed at avoiding financial crises by stabilising the exchange rate and holding foreign exchange reserves pushes the economy to a perennial stock disequilibrium.

Thai Capital after the Asian Crisis

The 1997 east Asian crisis marks a major shift in the role and prospects of private domestic capital, part of a major adjustment to globalisation with far-reaching implications. Over the second-half of the 20th century, Thai domestic capital had played a key role in expanding the productive potential of the economy. After the crisis, it has been confined mostly to a rentier and service role in an economy dominated by multinational firms.

Financial Liberalisation, Crises and the Role of Capital Controls: The Malaysian Case

In the wake of the east Asian financial crisis in mid-July 1997, not only were the initial policy initiatives taken by the Malaysian government to counter portfolio capital flight ill-conceived, the currency and capital control measures seem to have been motivated by political considerations and the desire to protect well-connected businesses. The Malaysian experiment with capital controls was compromised by political bias, abuse by vested interests and inappropriate policy instruments. However, this is not to reject the desirability of the judicious use of capital controls.

The Philippines Ten Years after the Asian Crisis

Statistical data indicate that the Philippines has recovered post-2002 from the east Asian financial cataclysm. Recovery has been spurred by services and overseas workers' remittances, but the share of agriculture has declined and the industrial sector has been stagnant. There is also the view that the growth rates of recent years have been overestimated and the effects of the crisis have not been completely erased. This paper points out that there is a need for prudent macroeconomic policies that will help avoid vulnerability and prevent a déjà vu.

Continuity or Change? Finance Capital in Developing Countries a Decade after the Asian Crisis

Ten years after the east Asian crisis, the volume of capital flows to developing countries has exploded, but has vulnerability to crises been reduced because of the prudence built into the financial system? On the contrary, we are in fact witnessing trends, which imply an increase in financial fragility that can lead to further crises, with extremely adverse implications for growth, stability, employment and social welfare. New measures to govern finance and financial flows are a necessity.

Adjustment, Recovery and Growth: A Consideration of Five 'Crisis' Countries of East Asia

In this paper, the post-crisis experience of the five economies of Thailand, South Korea, Malaysia, Indonesia and the Philippines is considered. It is found that while output growth has recovered to varying degrees, in all these countries there has been a significant change in the pattern of growth and investment, which has meant that the subsequent growth has had very different implications for employment generation, compared to the previous period.

The End of Developmental Citizenship? Restructuring and Social Displacement in Post-Crisis South Korea

Until 1997, successive governments of South Korea had pursued "developmental citizenship" - industrialisation at a pace that created jobs and raised incomes, even if social security benefits were minimum. The late 1990s crisis ended all that: the South Korean economy has recovered and is growing strongly but the quality of life has not. Temporary and underpaid jobs have become normal and on-the-job poverty has increased sharply. Income inequality has worsened and the population under the official poverty line has sharply increased in number and as a proportion of the population.

Ten Years After: Impact of Monetarist and Neoliberal Solutions in Indonesia

The financial disaster that erupted in east Asia 10 years ago had a devastating impact on Indonesia as the economic contraction was the worst among all the affected countries. Indonesia experienced the entire range of economic crises, from an exchange rate collapse to a liquidity crunch and banking sector breakdown, leading ultimately to bankruptcy in the corporate sector. This paper reviews the social and economic costs of policy errors including the bitter experience with the International Monetary Fund, which, in fact, escalated the crisis. The efforts to bring an end to the imf programme were thwarted by the actions pushed by the new era economic group that deepened the dependence on international debt.
Back to Top