| Introduction | | | | Another suggestions made by South Asian critics is |
| South East Asian countries (China, South Korea, | | | | the fact that their governance structures with regard |
| Japan and Taiwan) have been the object of | | | | to IT and capital flow have not been in tuned with |
| economic discussions over the past decade. This | | | | changes in the policy. These critics assert that in |
| began in the nineties where experts called these | | | | order for South East Asian countries to boost their |
| countries ‘economic miracles'. However, in the | | | | economies, they should not merely focus on |
| late nineties, these countries begun underperforming | | | | gathering capital but should do this against the |
| after the vulnerabilities of their economical and political | | | | backdrop of policy changes. They also add that |
| reforms were exposed. In the late nineteen nineties, | | | | Information Technology cannot be regarded as an |
| the Asian crisis sparked off a lot of debate about the | | | | agent for change alone if it does not operate within |
| problems of the South East Asian economic and | | | | the confines of political and social changes. |
| political agenda. Many experts began prescribing new | | | | While these arguments may be correct, one cannot |
| approaches that would deal with the crisis. Some of | | | | help but see some of the faults that can spring from |
| them prescribed reformist agendas that would | | | | imposing such systems upon the South East Asian |
| prepare these south East Asian countries for future | | | | countries. It should be noted that within these |
| effects of globalization. The essay shall examine the | | | | countries, the issue of political governance has been |
| legitimacy of these prescriptions and give | | | | associated with economic governance. Underhill |
| recommendations on the way forward. (Winters, | | | | (2000) asserts that trying to separate these two |
| 2000) | | | | categorizes within the South East Asian context |
| How East Asia performed before the economic crisis | | | | would be an exercise in futility. It would therefore be |
| The forces of globalization propagated East Asia's | | | | necessary to look at the two types of systems |
| economic success. Globalization in this context refers | | | | together. In the South East Asian context, it would |
| to the unprecedented mixing of cultures, technology, | | | | be extremely difficult separate those two entities |
| manpower and resources from different parts of the | | | | yet this is the underlying principle behind the reformist |
| world; a phenomenon brought on by Information | | | | agenda brought forward by South east Asian critics. |
| Technology, the end of communism and the shift | | | | The underlying principle behind these suggestions is a |
| towards free market forces. The overall effect of | | | | neo-liberal system with separate entities of political |
| globalization within the South East Asian countries | | | | and economic governance. However, imposing such a |
| was a rapid increase in the standards of living for a | | | | system upon the South East Asian countries would |
| large portion of the region. It also led to increased | | | | meet stiff opposition. This is because it would be |
| literacy levels within the countries hence a high quality | | | | creating a market-centered approach to the |
| labor force. On top of this, the South East Asian | | | | economy. |
| economies boasted of better health. (Sell, 2000) | | | | Additionally, assertions by South East Asian critics |
| Two major ‘recipes' were crucial to the | | | | about adopting a neo-liberal market approach would |
| economic success of the early nineties. These were | | | | fail drastically owing to the non-existence of |
| summarized in the World Bank report (1993) known | | | | compatible structures within those countries. It should |
| as the East Asian miracle. The two issues were; solid | | | | be noted that each country has its own unique |
| macro-economic policies and government intervention. | | | | political and economic models. This models do not just |
| The report studied the overall patterns used by eight | | | | happen overnight. They are as a result of the |
| South East Asian countries and found that these | | | | historical phases that those respective countries have |
| respective governments did the following. First, they | | | | undergone. Even the United States, which is keen on |
| reduced fiscal spending and encouraged greater | | | | imposing its political reforms to the South East Asian |
| savings. Those savings were then redirected into | | | | region, did not just find themselves in those |
| infrastructural development and export growth. The | | | | governance structures; they got there through some |
| South East governments demonstrated to the world | | | | systematic steps inherent in their own history. Due to |
| just what could occur when the government | | | | this reason, prescribing aggressive reforms to the |
| collaborated with the private sector with the aim of | | | | South East Asian continent without considering their |
| improving their economy. Besides this, the | | | | governance institutions can be deemed unrealistic. |
| government introduced flexibility within the labor | | | | (Beeson et al, 2000) |
| markets and also changed their credit markets. It | | | | Some of the changes that occurred prior to the crisis |
| should be noted that this latter aspect was the | | | | created some strong systems that eventually |
| object of great debate after the Asian crisis. | | | | characterized their political and economic environment. |
| South East Asian countries reaped the benefits of | | | | One such case is the issue of elite control. Therefore, |
| these reforms because their capital flow increased | | | | imposing neo-liberal reforms in South East Asia can |
| adversely as was seen in GDP growth rates of close | | | | only be effective if these changes were not present. |
| to five point five percent annually. Additionally, these | | | | However, because they exist and they are there to |
| countries could also boast of greater foreign | | | | stay, it would be difficult to change them. The |
| investments and increased productivity within their | | | | reasons why those changes are likely to resist |
| local environments. Because of the savings culture | | | | change within the South East Asian arena is because |
| adopted in the fiscal markets, the countries could | | | | those same groups were responsible for the success |
| provide stable economic environments for greater | | | | of the emerging economies in the early nineties. |
| exportation. This was the point at which major | | | | Consequently, South east Asian governments and |
| sectors of their economies began opening up to the | | | | societies alike owe these groups some form of |
| world. One particular area that depicts these changes | | | | loyalty for bringing about the changes that |
| was the industrial sector. However, some critics | | | | characterized the early nineties even when those |
| assert that these policy reforms brought on the | | | | changes are no longer relevant. |
| problems that the country experienced in the late | | | | A reformist agenda within the South East Asian |
| nineties because they ended up benefiting the elite. | | | | countries is likely to fail owing to the fact that most |
| (Higgot, 1999) | | | | South East Asian countries have deep seated |
| Causes of the South East Asian crisis | | | | institutional reforms already. Taking the example of |
| Globalization was the key factor propellant of the | | | | Japan, this country adopted a developmental model |
| South East Asian economic and political boom yet at | | | | of governance. The country realized that it was not |
| the same time, it was one of the major reasons for | | | | in a position to be laid back about the governance |
| its downfall. Through globalization, the South East | | | | approach. They had developed at later stages |
| Asian countries began operating in extremely | | | | compared to their Western counterparts. |
| competitive markets. The countries that had | | | | Consequently, in order to remain competitive, there |
| traditionally dominated the world markets were facing | | | | was a need to create a push within the system. This |
| threats from these emerging economies. | | | | would only be possible by direct government |
| Consequently, the traditional countries started making | | | | intervention in the markets. The reform agenda |
| their own changes. They did not want to be | | | | proposed by South East Asian critics centered on |
| displaced by the emerging economies. | | | | creating liberal markets where decisions should be |
| Despite the latter fact, there was another more | | | | made solely on market forces. By instructing such |
| serious reason that cased the 1997 Southeast Asian | | | | reforms, this would be going against some of the |
| crisis. This was the susceptibilities of the Asian | | | | developmental aspects of the South East states and |
| markets' macro economic forces. Many critics have | | | | would therefore solicit friction from the latter |
| asserted that the South East Asian models was very | | | | countries. (Beeson, 2001) |
| effective at mobilizing resources but was very poor | | | | In line with the latter arguments, it will also be difficult |
| at controlling those resources that needed to be | | | | to impose some of the suggestions surrounding the |
| controlled. For instance, there were no set regulatory | | | | neo-liberal systems because there are massive cases |
| mechanisms for choosing the most productive areas | | | | of immigrations within the South East Asian region. |
| of the economy. As matter of fact, key industries | | | | For instance, many Chinese have relocated to other |
| were left out in these capital allocations thus leading | | | | parts of the South Eastern region. Woo Cummings |
| to plummeting prices and poor service delivery. | | | | (1998) estimates this number at around fifty million. |
| Examples here include the energy sector and the | | | | The large dispersion rates of the Chinese people |
| telecommunications sector. One cannot undermine | | | | have been facilitated by their huge population size |
| the importance of these two areas to the economy | | | | and also by the need to cushion themselves against |
| yet the Asian continent had been very poor at | | | | the hostilities of the external market. The overall |
| implementing changes here. As a result, the countries | | | | result of such a system is that many Chinese |
| could not eliminate the underperforming sectors of | | | | capitalists have prospered in the South Eastern |
| the economy thus allowing them to drag other parts | | | | region. They utilize their prior contacts to access |
| of the system too. (Rhodes, 1997) | | | | resources and penetrate regional markets. In this |
| Other critics also assert that the Asian economies | | | | regard, it would be very complicated to try and fight |
| missed the mark when it came to local | | | | such a complex network yet this is the basis of the |
| manufacturers and businesses. The countries had | | | | reformist agenda suggested by critics. |
| tried protecting their local manufacturers while at the | | | | Political systems within the South east Asian |
| same time promoting exportation. This increased the | | | | countries have a large part to play in term of the |
| level of assets within the country without due | | | | overall success of the reformist agenda. This is |
| consideration as to which assets were more | | | | because political systems in these regions have |
| profitable to the respective countries. Most of them | | | | tended towards authoritarianism. While one cannot |
| grew their economies but failed to consider the issue | | | | assert that this may no be out rightly visible; there |
| of equity. | | | | are hints of this political system of governance in |
| Possible reforms | | | | various avenues. For instance, in China and Japan, |
| Some experts have suggested reforms that could | | | | their governments are used to having control on |
| assist South east Asian countries in the process of | | | | economic systems. The capitalists that have the |
| restoring back their past economic successes. | | | | capacity to drive the economy also happen to be |
| However, suggestions made by these experts were | | | | political entities. Consequently, trying to pursue a |
| not well received by the Asian counterparts. Part of | | | | system that is tailored on a liberal approach would |
| the reason for their lukewarm response is because | | | | not be very realistic owing to the fact that it can |
| the South East Asian model of economic and political | | | | meet stiff resistance from such political systems. The |
| reform created a system that encouraged elites | | | | South East Asian political governments are deemed |
| within the system. These elites wanted to maintain | | | | as superior to civil society and therefore trying to |
| their positions and they have the capacity to do so. | | | | empower the latter would not be plausible in the |
| Consequently, suggesting reforms through aggressive | | | | region. (Searle, 1999) |
| economic and political transformation will be | | | | There are certain dynamics within the South Eastern |
| extremely difficult to implement owing to these | | | | political context that would make it extremely difficult |
| powerful elites. (Winters, 2000) | | | | to adopt a western style reform agenda. This is |
| As if this is not enough, some of the changes that | | | | because of the nature of operation of the Non |
| accompanied the opening up of the South east Asian | | | | Government Organizations. In the Western context, |
| economies have gone a long way in emerging the | | | | NGOs act as separate entities to the state and |
| local pollution. The economic and political models | | | | therefore have the capacity to affect the economic |
| adopted prior to the Asian crisis brought about | | | | and political landscape of Western states without |
| intellectual interactions among members of these | | | | soliciting interference from the respective governing |
| Asian countries thus exposing them to the benefits | | | | bodies. However, in the Asian context, the same |
| of globalization. This means that locals within those | | | | features do not apply. As a matter of fact, NGOs |
| states are actually happy with the effects of | | | | characterize government preferences. This is actually |
| globalization and could therefore resist any reformist | | | | the notion behind government owned NGOs. One of |
| agenda that can threaten to change the nature of | | | | the problems that spring from such an approach is |
| the current system. Taking an example of a fast | | | | that no external bodies can interfere in government |
| food company such as McDonald's, South East Asian | | | | regulation. In fact, this principle of government |
| compatriots have enjoyed the services of this food | | | | superiority directs some of the regional bodies |
| outlet and actually want it to remain there. This | | | | formed for those respective countries. It has been |
| therefore brings in the argument on true effects of | | | | found that South East Asian bodies have a principle |
| globalization. Globalization is not a threat to South | | | | of no interference in the internal affairs of another |
| East Asian countries because multinationals from | | | | countries. Consequently, imposing a reformist agenda |
| other countries come and force their way into local | | | | in such a stringent political arena would be an exercise |
| markets; on the contrary, it is a threat to these | | | | in futility the power of the state overrides all other |
| Asian countries because their consumers have seen | | | | influences and would therefore not be feasible with |
| the benefits that emerge from it and now want to | | | | the South East Asian operating environments. (Suzuki, |
| continue benefiting from it. Consequently, imposing | | | | 2000) |
| economic and political reforms that are designed to | | | | Conclusion |
| counter such effects would meet stiff resistance | | | | Every country in the world follows their political and |
| from the South East Asian locals. (Lee, 1999) | | | | economic path. These paths may be relevant and |
| Some economists have also suggested that imposing | | | | successful at certain points but may not be applicable |
| a strong and totally different economic system would | | | | in other circumstances. However, they still form part |
| also bring problems because the major problems | | | | of the political and social institutions in those countries. |
| behind the crises emerge from allocation of capital to | | | | It would therefore be unfair to impose another |
| areas that do not yield effective returns. Examples | | | | country's economic systems upon another system |
| of such sectors include; | | | | yet this is the basis behind the reformist arguments |
| - Corporate governance | | | | proposed for South East Asian countries. The latter |
| - Rule of law | | | | country's political and social structures would not be |
| - Eliminate corruption | | | | favorable for Western-style liberal market structures |
| - Dispose of underperforming loans | | | | and therefore such reforms would fail drastically. |
| - Create reforms within banks | | | | Reference: |
| - Allocate capital effectively | | | | Beeson, M., Jayasuria, K. & Kim, H. (2000): Politics |
| - Etc | | | | and Markets in the wake of the Asian crisis; |
| Some of the latter reforms seem better said then | | | | Routledge |
| done. This is because implementing some of the | | | | Beeson, M. (2001): Globalization, governance and the |
| reforms mentioned above would require rigorous | | | | political economy on public policy reform in East Asia, |
| transformation of the economic sector which as was | | | | Journal of governance, 14, 4, 481-502 |
| seen earlier could bring about stiff resistance from | | | | Cerny, T. (1997): Paradoxes in competition states; |
| vested interests there. | | | | Journal of Government and Opposition, 32, pp |
| The role of good governance in revitalizing South | | | | 251-271 |
| east Asian economies | | | | Higgot, R. (1999): Resisting the imperialism of |
| Some experts have suggested that the major | | | | economics; University of East Anglia Conference |
| problem behind the South East Asian political system | | | | paper, 9th September |
| is the fact that there are inherent corrupt systems. | | | | Lee, S. (1999): Political economy; Journal of far |
| This means that attracting foreign investors within | | | | Eastern Economic review, 22, 49, 15 |
| such systems is very difficult because they face the | | | | Rhodes, R. (1997): Understanding governance, |
| danger of issuing or receiving resources based on | | | | Governance, Policy Networks, Accountability and |
| their relationships rather than on economics. This | | | | reflexivity, Open University press |
| makes their markets unpredictable and discourages | | | | Suzuki, T. (2000): For and against NGOs; report for |
| investments. Such experts have even cited countries | | | | the New Left, No. 2. pp 63-84 |
| such as Singapore that have done very well in the | | | | Sell, S. (2000): Big Business and the new trade |
| international markets. They have been able to make | | | | agreements; Oxford University Press |
| their mark because of their zero tolerance on | | | | Searle, P. |
| corruption. (Cerny, 1997) | | | | |