Economic Crisis in Southeast Asia: Origins & Causes

Economic Crisis in Southeast Asia: Origins & Causes

  • 17 November 1998

Asia’s dramatic economic and financial meltdown appears to confirm the view that we are witnessing the end of “Asian capitalism” and moving into a global era of free markets. Amongst neo-classical economists and within the IMF it is generally proposed that because the crisis was caused by excessive government intervention in market mechanisms, recovery necessarily requires structural changes to end these market-distorting systems.

Critics of this position argue that fundamentally sound economic systems were unraveled as a consequence of hasty and imprudent deregulation of financial systems. Hence, the solution lies in proper regulation of global capital markets. Robison proposed instead that the origins and outcomes of the crisis are best understood in terms of the impact of structural changes upon the contest between coalitions of power and interest to define the rules that govern economic activity.

In the case of Thailand, Malaysia and Indonesia, rapid and unconstrained deregulation, especially in the financial sector, coincided with and facilitated the rise of powerful politico-business oligarchies in the early 1980s.

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Tuesday 17 November 1998

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Tuesday 17 November 1998

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