The article presents a review of the book called “After the Storm: Crisis, Recovery and Sustaining Development in Four Asian Economies” published in 2004. The volume deals with issues that relate to the economy of the Asian nations after the financial crisis of the late 1990s. The book focuses on the experiences of four nations, including Malaysia, Indonesia, Thailand, and South Korea.
Analyzing the situation and its implications in broader social terms, the book addresses the processes in political regulation of the economy that preceded the crisis. The authors deal with the issue of premature liberalization of the financial sector and capital accounts and critically assess the impact of policies proposed by the IMF. They value the outcomes of the Keynesian policies oriented toward reflation. Overall, the authors tend to criticize the way the Asian economies and financial sectors have been liberalized and point to the premature and imperfect reforms that happened in them.
On the other hand, the authors also examine the processes that took place in these economies in the post-crisis environments, such as crisis management strategies. The role of capital controls and Keynesian policies in Thailand and Malaysia are explored in depth. These policies are then compared with the guidance from the IMF suggested for the reforms and structural adjustments after the crisis.
The author of the article carefully reviews the topics covered in the book, at the same time criticizing it for lack of cohesion. He states that the volume reads like a disparate collection of different papers rather than a comprehensive treatment of a certain issue providing relevant ideas and material to cover this issue. The author arrives at the conclusion that the book does not provide an account of some issues that are stated actually in the introduction as the coming agenda to discuss. Specifically, one point that is omitted is the possibility that markets will return to the same rate of growth that occurred before the crisis.
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The book, the authors note, has presented a significant volume of analysis related to the economic policy-making in Asia before, during and after the crisis. However, the papers collected failed to reflect how the crisis was precipitated by the economic policy that was inadequate. The author of the article believes that research at this point has proved that the problems were not caused by the opening of accounts per se, but by the accumulation of political slips that made this opening inadequate. As proof, he cites the evidence that other nations that effectively implemented account opening like Australia and Singapore, did not see their economies collapse.
Dr. Athukorala also believes that policies adopted by the Malaysian government to stem capital outflow were effective. In this respect, he disagrees with the authors of the book. He states that with the adoption of Keynesian policies by the government, these controls were effective in preventing capital outflow and controlling the state of the liquidity in this Asian nation.
Overall, the author admits, the book presents some useful analysis that digs deep into issues related to the Asian financial crisis. As such, it can be recommended to policy-makers interested in material on formulating economic policy. Besides, it can come in useful for many people who take an interest in economic issues.
Reference
Athukorala, P.-C. (2005, December).
After the Storm: Crisis, Recovery and Sustaining Development in Four Asian Economies. ASEAN Economic Bulletin, 22(3), p. 340-342.
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