Conclusion: Contesting the return to State-Led Economies

Abstract

One decade after Thailand’s currency crisis set in motion a broader set of economic crises in the developing world, a number of surprising patterns stand out. First, several leading emerging markets, in a striking reversal of fortune, have accumulated financial reserves equal to nearly half of their GDP. Secondly, some struggling and heavily subsidized companies have improbably turned the corner to profitability and expansion. Hynix of Korea is one obvious example. The economist would challenge the opportunity cost of the public funds devoted to these companies whereas the nationalist would claim that the investment paid off. Thirdly, with the power often attributed to global capital and the IMF, few observers would have foreseen Argentina successfully conducting cutthroat negotiations with the international economic community, and then both attracting financial flows and achieving growth during the mid-2000s. Finally, international policy-makers proved more self-reflective than normal. The IMF’s quasi-independent review mechanism released a report noting that ‘a crisis should not be used as an opportunity to force long-outstanding reforms, however desirable they may be, in areas that are not critical to the resolution of the crisis’ (IEO 2003: 53), with particular reference to the costs of this policy in Indonesia, where the banking sector should have been the absolute focus (IEO 2003: 5).KeywordsForeign InvestmentForeign FirmHedge FundPrivate EquityForeign CapitalThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.