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The Processes Of Growth And Liberalism Were Arguably Reinforced By Membership ...

The processes of growth and liberalism were arguably reinforced by membership of the Association of South East Asian Nations (ASEAN). ASEAN originally consisted of Indonesia, Malaysia, the Philippines, Thailand, Singapore, and Brunei, with more countries joining later (Comfort, 1993 p. 23). To some the financial crisis of 1997 came as a shock, although there are arguments about how long-term or long lasting the implications of the meltdown are upon the wider East Asia region as a whole. The implications to be explained and examined that resulted from the financial meltdown include the need or desirability for political, as well as economic liberalism, economic reforms to reduce corruption, improve efficiency and also measures to restore confidence in the financial markets of East Asia. The financial meltdown on 1997 could arguably have had implications beyond East Asia, especially if the importance of Japan and China to the global economy is taken into account. South Korea, Malaysia, and Indonesia amongst other countries in East Asia had become important parts of the global economic system. Decades of growth and extensive development, as will be explained below, meant that the countries of East Asia have increasingly interconnected economies that are strongly linked to the global economy (Turner, 2001 p.49).
Globalisation and computer technology means that information and money can be exchanged in a matter of moments. This can have the advantage of making investments rapidly or the disadvantage of speeding up economic crisis or panic across regions or the whole world. Currency speculators could force de-valuations on countries such as Britain in 1992 or more destructively Mexico in 1994, for example. Once one country's currency in a region has been de-valued, currency speculators will target other economies in the region to make further pickings, this is what happened in the East Asia region after Thailand de-valued the Bhat in 1997. Governments that are desperate to avoid devaluation will usually follow similar strategies to those adopted by Thailand. For instance, interest rates will be increased, with foreign currency reserves and central bank reserves being used to keep the currency overvalued. Without co-operation from other governments and central banks such strategies are unlikely to succeed and potentially do more harm than a devaluation carried out by the government or the central bank concerned with setting exchange rates (Cleaver, 2002, p.198).
At the end of the Second World War, Japan was in ruins, as previously mentioned, previous high levels of economic development were shattered in defeat. The United States helped the Japanese to rebuild their country, mainly to prevent the spread of communism into Asia.


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