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

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POLITICS-Bankruptcy of the Congress

people of cast Asian countries who arc more frugal and nationalistic, which attitudes have formed the basis of their high domestic saving rates. The south Asian countries, such as India and Pakistan, perhaps fall between these two extremes, The Mexican case also suggests that to curb the speculative proclivities of the domestic rich restraints on capital account transactions, particularly with regard to the asset choices of residents, are unavoidable. In other words, countries such as India must necessarily proceed cautiously in regard to capital account liberalisation. While foreign investors may be assured of capital and income repatriation, residents should continue to be subject to restraints on capital transfers. The east Asian countries in fact adopted such measures which, combined with the people's own attitudes, helped to prevent large capital flights. Quite the contrary has been the case of the Latin American countries which, under American pressure. opened up their economics, liberalised their capital accounts and freed their financial systems too much too soon with results which have been there for all to see.

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