This important book provides a cogent critique of the nature of Southeast Asian capitalism. It argues powerfully that the crises are due not to excessive regulation, but to too much financial liberalisation and a consequent undermining of monetary and fiscal governance. While recognising some macroeconomic problems and abuses of state intervention in the region, the book also highlights the nature and implications of IMF and domestic policy responses which exacerbated the crises. It shows how the herd behaviour of stock markets and injudicious official responses transformed an inevitable correction of overvalued currencies into wholesale collapse. The danger now is that the policies which built the success of Japan and the first wave of newly industrialising economies will no longer be available to the rest of the region. The analysis contained in this book raises profound questions which resonate way beyond the Asian region itself. They relate to the appropriate role of the state, the policies of the IMF and the viability of the deregulated free market capitalist model which these and other Third World countries have been encouraged to pursue. Part I introduces the crisis; highlights the inadequacies and failure of international financial governance; shows how different this crisis is from the earlier Mexican collapse; and investigates the policies which the IMF is now insisting on. In Part II, the situations in Thailand, Indonesia, Malaysia, the Philippines and South Korea are presented, providing historical background, the course of the crisis until early 1998, and the reactions of the various governments.
Author: Jomo K.S. is Professor of Economics at the University of Malaya. The contributors are economists from within and beyond the region.
