The developmental implications of the Pacific Asian crises: The Thai experience

Abstract

The 1997-98 Pacific Asian crises have left most established interpretations of the region's long-term growth in serious disarray. This paper begins the task of reinterpreting Pacific Asian economic growth through, in particular, an examination of the Thai experience. It is argued that, while Thailand's growth from the early 1960s was associated with the least interventionist state in Pacific Asia, by international standards there were high levels of price distortion. From the late 1970s changed circumstances reduced both the level and, more significantly, the effectiveness of the Thai developmental state. These developments, while playing a role in the sustaining of the Kingdom's rapid growth and structural change during the period 1986-96 also made the Kingdom extremely vulnerable to financial disruption. It is suggested that the Thai situation has wider application in seeking to understand Pacific Asian growth in general and the 1997-98 crisis in particular. This leads to a questioning of the IMF neoliberal-based interpretations of Pacific Asian growth and the prescriptions for dealing with the crises.