Reforming East Asia for Sustainable Development

Abstract

This article reviews the challenges faced by four East Asian economies in the wake of the currency and financial crises of 1997–98. Perceptions and opinions of East Asian economic development moved swiftly from commendation to condemnation, revealing a simplistic response to an experience that was seen to have challenged the neo-liberal orthodoxy. As such, government–business relationships and corporate governance have received particular attention and criticism. However, recovery is now recognized to have been facilitated by reflationary Keynesian policies, rather than the draconian IMF-prescribed programmes or ‘reform’ of corporate governance. Indeed, there is growing attention to, and concern with, the consequences and appropriateness of ongoing Anglo-American inspired financial liberalization. The regional slowdown of foreign direct investment, slowness of technological progress, and changes in investment policy present considerable challenges for ASEAN economies in particular. This article concludes that while liberalization of the global financial infrastructure continues, convergence of economic arrangements is not necessarily inevitable, and indeed, that an eclectic mix of policies and institutions is not only possible, but preferable.