Do Markets Need Transparency? The Pivotal Cases of Singapore and Malaysia

Abstract

The Asian economic crisis gave birth to a new international consensus about the need for increased and more timely and reliable information to sustain and develop markets. It is little wonder that leaders of two nations heavily dependent on global investment would respond. However, the form this has taken is pragmatic accommodations to specific informational needs of business, rather than any commitment to generalised transparency improvements. The governments of Singapore and Malaysia remain extremely nervous about broader conceptions of transparency. Ideas about the rights of citizens to information, the importance of a free press to more transparent and accountable systems and attempts to subject state institutions to greater public scrutiny are resisted with vigour. Indeed, if there has been any significant institutional convergence since the crisis began, it has not been towards liberal democratic models. Rather, it has involved the emulation in Malaysia of the established Singapore media regime of legalistic media intimidation, surveillance and public relations management. The comparison between Singapore and Malaysia also demonstrates that the importance of transparency to business is relative rather than absolute. How else could we explain the extremely high degree of international business confidence in Singapore, both before and after the crisis? As we have seen, Singapore lacks market transparency in a range of basic areas. However, political stability and positive perceptions of the government and bureaucracy mediate the impact of this on investors. Where those perceptions are absent or not so strong, as in Malaysia, transparency shortfalls arouse greater suspicion and concern.