The financial crisis of 1997–98 and the end of the asian developmental state

Contemporary Southeast Asia

Volumn 22, Issue 3, 2000, Pages 570-593

  Pang, Eul Soo ^a  

^a UNIVERSITI KEBANGSAAN MALAYSIA   (Malaysia)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84937327362     PISSN: 0129797X     EISSN: None     Source Type: Journal    
DOI: 10.1355/CS22-3G     Document Type: Article

References (64)

1. To be fair to history, I must point out that the political paradigmatic practices that the Western media has associated with the Asian state were also the driving force in American politics: the Tammany Hall of New York elected Grover Cleveland, a crony of Tammany bosses, President of the United States in the 1890s; Harry Truman owed his political rise to the Pendergast machine politics in Kansas City; and Nixon accused Richard Daily’s Irish political machine in Chicago of tipping the victory to John Kennedy by rigging the election.
2. Anthony Giddens, The Third Way and Its Critics (Malden, MA: Blackwell Publishers, 2000), p. 126.
3. Chalmers Johnson, Japan: Who Governs? The Rise of the Developmental State (New York: W.W. Norton, 1995), p. 67; and Donald K. Emmerson, “A Tale of Three Countries”, Journal of Democracy (October 1998): 35–54, esp. 51.
4. Fernando Henrique Cardoso, Análises do modelo brasileiro (Rio: Paz e Terra, 1972).
5. Lee Kuan Yew, “East Asia’s Status in the 21st Century”, Speech given at ISIS Malaysia, Kuala Lumpur, 16 August 2000.
6. Cited in Johnson, op. cit., p. 91.
7. Cited in Johnson, op. cit., pp. 64–68, 91–101. His controversial but seminal work, MITI and the Japanese Miracle: The Growth of Industrial Policy 1925–1975 (Stanford: Stanford University Press, 1975) gave rise to the “revisionist school” which has often been accused of Japan-bashing and even being racist.
8. For the Asian crisis as a currency crisis, see Manuel F. Montes and Vladmir V. Popov, The Asian Crisis Turns Global (Singapore: Institute of Southeast Asian Studies, 1999);
9. Manuel F. Montes, The Currency Crisis in Southeast Asia (Singapore: Institute of Southeast Asian Studies, 1998), pp. 3–6.
10. IMF Staff, “The Asian Crisis: Causes and Cures,” Finance & Development (June 1998), http://www.imf.org. Ajit Singh, “‘Asian Capitalism’ and the Crisis,” in Global Instability: The Political Economy of World’s Economic Governance, edited by Jonathan Michie and John Grieve Smith (London: Routledge, 1999), pp. 9–36, esp. pp. 18–20.
11. For a more thoughtful reflection on the crisis, see Bruce Cumings, “The Asian Crisis, Democracy, and the End of Late Development”, in Politics of the Asian Economic Crisis, edited by T. J. Pempel (Ithaca: Cornell University Press, 1999), pp. 17–44; and François Godement, The Downsizing of Asia (London: Routledge, 1999).
12. J. A. Kregel, “East Asia is Not Mexico: The Difference between Balance of Payments Crises and Debt Deflation,” in Tigers in Trouble: Financial Governance, Liberalisation and Crises in East Asia, edited by K. S. Jomo (London: Zed Books, 1998), pp. 44–62; and Jeffrey Sachs, “The Wrong Medicine for Asia,” New York Times (3 November 1997).
13. Ross Garnaut, “Indonesia”, in East Asia in Crisis: From Being a Miracle to Needing One?, edited by Ross H. McLeod and Ross Garnaut (London & New York: Routledge, 1998).
14. Richard Hu, “Asia 2000”, SES Journal: An Official Publication of the Stock Exchange of Singapore Ltd (July 1997), pp. 6–14; and Kregel, op. cit., p. 47.
15. S.K. Jomo, “Introduction: Financial Governance, Liberalisation and Crises in East Asia”, in Tigers in Trouble, pp. 1–32, esp. pp. 3–4.
16. Kregel, op. cit., p. 47.
17. Mahathir Mohamad, A New Deal for Asia (Selangor, Malaysia: Pelanduk,1999); Lim Kok Wing, Robert Ho You Chai, and Yee Mee Fah, Hidden Agenda (Kuala Lumpur: Limkokwing, 1999); and John Funston, “Malaysia: A Fateful September”, Southeast Asian Affairs (Singapore: ISEAS, 1999), pp. 165–84, esp., pp. 166–67.
18. Mahathir Mohamad, Globalisation, Smart Partnership and Government (Selangor, Malaysia: Pelanduk Publications, 2000), pp. 61–67.
19. Bank Negara Malaysia, “The East Asian Crisis — Causes, Policy Responses, Lessons and Issues”, Working Paper No. 4 (June 1998).
20. IMF Staff, op. cit.
21. United Nations, World Investment Report 1998: Trends and Determinants (New York: United Nations, 1998), p. 210.
22. “Mr George Discusses the Problem in Asia and Considers the Risk They Pose to the Global Economy”, Speech by the Governor of the Bank of England, E.A.J. George, at the British-American Chamber of Commerce Lunch, London, in BIS Review, 22 January 1998, http://www.bis.org.
23. “Mr Yam Comments on the Financial Turmoil in Asia,” Address by the Chief Executive of the Hong Kong Monetary Institute, Mr. Joseph Yam, JP, at the Euromoney Asia Pacific Issuers and Investors Forum, in BIS Review, 12 February 1997, http://www.bis.org.
24. World Bank, The East Asian Miracle: Economic Growth and Public Policy (New York: Oxford University Press, 1993), pp. 347–68.
25. “Mr Yam Comments.”
26. “Frozen Miracle,” The Economist: A Survey of East Asian Economies, 7 March 1998, pp. 1–2.
27. Nelson Graves, “Malaysia has only itself to blame, says Najmuddin,” SunBiz, 7 June 2000, p. 1.
28. “Frozen Miracle,” p. 2; and Daljit Singh and Tan Maung Maung Than, eds., Regional Outlook: Southeast Asia 1999–2000 (Singapore: Institute of Southeast Asian Studies, 1999), pp. ix–xii.
29. S. Jayasankaran, “Mahathir-Speak,” Crash of ‘97, edited by Dan Biers (Hong Kong: The Far Eastern Economic Review, 1998), p. 53. Funston observed that even Anwar Ibrahim was critical of the IMF towards the end of his political career; see Funston, op. cit.
30. Tom Holland, “Saving the Rupiah”, Far Eastern Economic Review, 8 June 2000, p. 77.
31. Hardev Kaur, “PM: Asia will recover completely, may even be stronger in 10 years”, New Straits Times, 10 June 2000, p. 23.
32. “Malaysia ends MSCI exile, but no rush to buy”, SunBiz, 2 June 2000, p. 3.
33. “IMF Concludes Article IV Consultation with Malaysia”, 25 July 2000, www.imf.org/ external/np/sec/pn/2000/pn0063.htm.
34. Ramlan Said, “Daim calls for quick settlement with Singapore”, New Straits Times, 27 August 2000, pp. 1–2, especially page 2.
35. “Time for Change”, Far Eastern Economic Review, 28 June 2000, pp. 48–50.
36. Jeffrey Sachs, “Ten Trends in Global Competitiveness in 1998”, World Economic Forum Global Competitiveness Report, 1998, http://www.weforum.org. Jeffrey Sachs, “IMF is a Power unto Itself,” Financial Times, 11 December 1997; Martin Feldstein, “Refocusing the IMF”, Foreign Affairs, March/April 1998; pp. 20–33; and Cumings, “The Asian Crisis”, p. 18, on Kissinger. See also “Frozen Miracle”, pp. 1–8.
37. Gerald P. O’Driscoll, Jr., “IMF Policies in Asia: A Critical Assessment,” The Heritage Foundation Backgrounder, No. 1265 (30 March 1999): 1–13, from www.heritage.org; Bryan T. Johnson and John Sweeney, “Down the Drain: Why the IMF Bailout in Asia Is Wasteful and Won’t Work,” The Heritage Foundation Backgrounder (5 December 1997), http://www. heritage.org.
38. Guillermo Ortiz Martinez, “What Lessons Does the Mexican Crisis Hold for Recovery in Asia?” Finance & Development (June 1988), http://www.imf.org.
39. World Bank, The Road to Recovery (Washington, DC: World Bank, 1998), pp. 80–85.
40. “The Feuding Ministers”, AsiaWeek, 2 April 1999, pp. 22–23.
41. Simon Montlake, Grainne McCarthy and I. Made Sentana, “Rupiah Falls Sharply After Minister’s Remarks”, Asian Wall Street Journal, 12–13 May 2000, p. 4.
42. “Indonesia will not implement capital controls, IMF”, SunBiz, 6 June 2000, p. 6.
43. “IMF Completes First Review of Indonesia under Its Extended Agreement”, 2 June 2000, www.imf.org/external/np/sec/nb/2000/nb0038.htm.
44. Lee, op. cit.; and Ramlan, op. cit.
45. “Thailand backs Asian monetary fund”, SunBiz, 10 June 2000, p. 6.
46. Biers, Crash of ‘97, passim.
47. “The Feuding Ministers”, pp. 22–23.
48. Singh mentions the failure of the model in his article, but he saw the structural inefficiency, not the end of the model itself. “‘Asian Capitalism’”, pp. 18–20. Samuel Bassey Okposin and Cheng Ming Yu, Economic Crises in Malaysia: Causes, Implications & Policy Prescriptions (Selangor, Malaysia: Pelanduk, 2000), pp. 159–60, offers the three lessons that the Malaysian experiences have taught policy-makers: Malaysia needs to interfere less with the private sector and allow it to gain confidence; control fiscal deficits and non-financial public enterprises; and tighten co-ordination of fiscal and monetary policy. It should be pointed out that none of the three is considered an integral policy component of the Asian developmental state.
49. Benjamin J. Cohen, The Geography of Money (Ithaca: Cornell University Press, 1998). The original concept used in the book is that a country, owing to reasons of high inflation, stagnant growth, and chronic balance of deficit, chose to use someone else’s money, such as the dollar. In this article, the concept is expanded to include the increase of hard currency by borrowing or attracting it for short-term investment, thus increasing the total available money at a given time.
50. Philippe Riès, The Asian Storm: Asia’s Economic Crisis Examined (Boston: Tuttle Publishing, 2000), p. 80.
51. Thomas L. Friedman, The Lexus and the Olive Tree (New York: FSG, 1999), p. 93.
52. Daniel Yergin and Joseph Stanislaw, The Commanding Heights: The Battle between Government and the Marketplace That Is Remaking the Modern World (New York: Simon & Schuster, 1998), p. 28.
53. Ben Dolven, “High Seas, High Stakes”, Far Eastern Economic Review, 11 May 2000, pp. 56–57.
54. Sara Webb, “DBS Restructures Businesses, Appoints Head of New Group”, Asian Wall Street Journal, 12–13 May 2000, p. 4.
55. “Singapore opens to foreign ownership of SingTel”, SunBiz, 23 May 2000, p. 7.
56. Manuel F. Montes and Muhammad Ali Abdusalamov, “Indonesia: Reaping the Market”, in Tigers in Trouble, pp. 162–180.
57. “The Developmental State: Odyssey of a Concept”, in The Developmental State, edited by Meredith Woo-Cumings (Ithaca, NY: Cornell University Press, 1999), p. 60.
58. Larry Diamond, Jonathan Hartyn, Juan J. Linz, and Seymour Martin Lipset, eds., Democracy in Developing Countries: Latin America, 2nd ed. (Boulder: Lynn Rienner, 1999), p. 14.
59. Robert Barro, Getting It Right (Cambridge MA: MIT Press, 1997); and Arend Lijphart, Patterns of Democracy: Government Forms and Performance in Thirty-Six Countries (New Haven: Yale University Press, 1999).
60. Halim Salleh, “Development and the Politics of Social Stability in Malaysia”, Southeast Asian Affairs (Singapore: ISEAS, 1999), pp. 189–91; James V. Jesudason, “The Developmental Clientelist State: The Malaysian Case”, Humboldt Journal of Social Relations 23, no. 1 (1997): 147–73; and Funston, op. cit., pp. 166–69.
61. In the Face of Attack: Currency Turmoil: The Contagion Effect, Impoverishment of Economies. Discipline Governments. The Challenge of Turmoil. After the Crisis. Future Challenges and Prospects. Selected Speeches and Articles by Dr Mahathir Bin Mohamad, Prime Minister of Malaysia (Kuala Lumpur: Limpokwin Integrated, 1998).
62. Chief Minister Abdul Taib Mahmud of Malaysia cautions that attack on authoritarianism can fragment fragile countries. The West should back off. See Sulok Tawie, “‘West’s democracy at all costs’ approach a danger to fragile states”, New Straits Times, 27 August 2000, p. 10.
63. The global quotient will include the inflows and outflows of financial capital, crossborder trades in goods and services, technology transfers, and joint R&D across borders, importing and exporting human capital, and finally a country’s access to the Internet.
64. Anthony Giddens, The Third Way: The Renewal of Social Democracy (Cambridge, UK: Polity Press, 1998).