The southeast asian financial crisis: Malaysia rejects economic orthodoxy

• Main Author: Sikorski, Douglas
• Format: Article
• Published: Penerbit Universiti Kebangsaan Malaysia 1999
• Online Access: http://journalarticle.ukm.my/1351/; http://www.ukm.my/~penerbit
• Institution: Universiti Kebangsaan Malaysia

Pinpointing the actual forces at work in the Asian Financial Crisis, especially politics and other non-market factors that contributed substantially to the loss of confidence, has not been easy. The causes of the crisis might be interpreted as either a failure of Asian capitalism, or alternatively a failure of market capitalism. The first interpretation obviously has a great deal of substance, and Malaysian economic institutions and public policy are not blameless - reckless over-expansion and credit growth, a pegged currency, political imbroglios, etc. Obviously, Malaysia needs to restore confidence in its financial institutions and practices. But Prime Minister Dr Mahathir Mohamad has rejected economic orthodoxy in favour of a more radical strategy. His dramatic gambit has some intellectual legitimacy based on a revisionist movement in economics and may well herald what will be the "new architecture" of the international monetary system