Globalization and economic disparities in East and Southeast Asia: New dilemmas

Abstract

The once high-performing East Asian economies were suddenly rocked by the 1997 financial crisis. This raised the question of whether the crisis signals the end of the 'Asian development model' and provides further evidence of the 'globalization of poverty'. This article attempts to answer this question by examining the connection between liberalization (and deregulation) and the pattern of poverty reduction and income inequalities in four East and Southeast Asian economies severly affected by the late 1990s crisis. Based on the findings, it contests the view that globalization means the end of the role of the state. Instead, it is argued that, while some states are playing the role of promoters of the globalization process, others are redefining and resisting globalization. The crisis also has drawn attention to a possible third policy option, which would involve the revitalization of the regulatory role of the state, greater attention to social issues and a more national approach to economic management.