Ebook The Politics of Economic Crisis in East Asia: Some Longer Term Implications
The currency and market turmoils in East Asia over the last nine months are every bit as much political crises as they are economic ones. Indeed, the political manifestations of these events may linger long after the necessary economic reforms have been introduced to return at least a semblance of economic normalcy to the region. In this paper I attempt to identify and assess some of the longer term political implications. I try to do so through what I think are Asian tinted lenses rather than Anglo American ones. As such, the paper offers an alternative reading of the East Asian economic crisis to that which exists in the mainstream of western policy analysis. It may also appear partial. But perceptions matter in politics and the perceptions I wish to present are, I would suggest, close to the hearts of many influential members of the East Asian public and private sector policy making elites. As such they are likely to influence the future of national economic policies in the region.
In section one, while accepting that particularist explanations have to apply on a country by country basis, the paper outlines those aspects of the crisis that appear common to all the countries notably, Thailand, South Korea, Indonesia and to a lesser extent Malaysia and the Philippines affected to-date. It also highlights the importance of the silent but fundamental role of Japan as a factor in the crisis. In addition, and notwithstanding the real/ material explanations of the crisis, it argues in a highly contentious fashion I concede that the crisis is in large part an ideological one that reflects a western conceptual inability to deal with the resistance of the Asian model of economic development to converge to, and conform with, an Anglo American form of capitalism.
In section two, the paper looks at the responses in Asia to the policy remedies proffered by the IMF and suggests that while the medicine will be swallowed in the short run, it will not be appreciated in the long run and a major implication of this interaction may well be an enhancement of the prospect of the continued development of an 'East Asian' as opposed to 'Asia Pacific' understanding of region. This assertion may run counter to contemporary conventional wisdom that in times of crisis the national urge to act independently comes to the fore. But the desire for national decision making autonomy in the face of economic crisis and the enhancement of a greater collective regional understanding in the wake of the crisis are not incompatible. Moreover, there is already some evidence of regional social learning from the crisis that may well consolidate the trend towards the enhanced economic policy coordination that gathered pace since the 1980s. It is instructive that the Chinese character for crisis has two components 'danger plus opportunity' (Far Eastern Economic Review, January 8 1998, 15).
By way of conclusion, the paper argues that there are broader implications for thinking about the management of the global economic order in the twenty-first century especially with regard to the re-regulation of international capital mobility, if indeed such re-regulation might prove to be possible that will emerge from the financial instability in East Asia in the closing stages of the twentieth century. This will demonstrate the tension between global and regional interests and severely test what I call the 'APEC consensus' an unstated commitment to neo-liberalism in the early stages of the twenty-first century.
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