ST Deep Dive: Asian financial crisis 25 years on, resurgent Imran Khan
Here's a round-up of recent commentaries and more by think-tanks in the region and elsewhere that could be of interest to those who watch Asia.
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Asian financial crisis, 25 years on
On July 2, 1997, the Thai authorities decided to float the baht, after having practically run out of international reserves in its defence since late 1996.
That move triggered the Asian financial crisis (AFC), a veritable storm over East Asian economies – from Indonesia to Malaysia, South Korea, Philippines and Hong Kong.
In the wake of the AFC, points out East Asian Institute director Bert Hofman, oil prices collapsed and as a result, the Russian Federation defaulted on its domestic debt. Brazil was also hit by renewed debt problems requiring a record US$42 billion bailout for the country.
The crisis, he says, happened in a global environment that experienced a rapid increase in capital flows and the emergence of an “electronic herd” of speculative capital that sought to exploit policy weaknesses around the globe.
Mr Hofman says the crisis also led to a major rethinking of international finance, of the role of the International Monetary Fund, including more flexible exchange rates, capital controls and “private sector participation” in official balance of payments support – the latter two were highly controversial during the crisis.
You can read his paper here.
Separately, I commented on the anniversary in this column, and asked the question: Could a property collapse in China cause the next contagion?
China learns from Ukraine war
The war is now in its fifth month, with the Russians showing no inclination to back off in Ukraine, which they invaded in late February.
Beijing, which increasingly looks like a strategic partner to Moscow, is watching intently – and learning – just as they drew lessons from the Gulf wars.
Carnegie vice-president for studies Evan Feigenbaum talks to scholars, including retired US Army lieutenant-general Charles Hooper.
Resurgent Imran Khan
Recent by-elections held in Pakistan’s Punjab, its most populous state, could dramatically impact the country’s national and regional political landscape.
Mr Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) won 15 of the 20 seats up for grabs.
With 188 seats in the Punjab assembly, the PTI and its allies now have a majority in Pakistan’s most important province.
The results reflect the success of Mr Khan’s concerted efforts to solidify his support base since being ousted from power in April 2022 through a no-confidence motion, says Associate Professor Iqbal Singh Sevea, director of the Institute of South Asian Studies.
That said, the results of the by-elections may portend further economic uncertainty, he adds.
Such concerns resulted in the stock market plunging by more than 700 points in the wake of the by-elections.
The by-elections may also influence the trajectory of national and regional politics in the coming months.
Unclos and ‘lawfare’
Thanks to blocking actions by conservative right-wing senators, the United States has not become a party to the 1982 United Nations Convention on the Law of the Sea (Unclos).
This, despite the overwhelming support for US accession by all American government agencies, major interest groups, the business sector, marine scientists and environmental organisations.
Neither is it likely to sign on in the foreseeable future.
So, if the US will not sign on to Unclos, what legitimacy does it have to point out other nations that may be seen as violating the provisions of the treaty?
Some would argue that the US studies in this direction are a form of “lawfare” that is part of the rising competition between the existing superpower and China, the rising superpower.
Emeritus Professor Robert Beckman, head of the Ocean Law and Policy Programme at the Centre for International Law, National University of Singapore, points out that US freedom of navigation operations are focused on excessive maritime claims that restrict the rights and freedoms of US naval vessels.
What they do not do is to challenge China’s excessive maritime claims to the natural resources in the South China Sea – a more critical concern of South-east Asian countries.
Read his paper, published by the Iseas-Yusoff Ishak Institute here.
Jokowi’s Cabinet
Indonesian President Joko Widodo’s recent Cabinet shuffle continues to be discussed in academic circles.
In this commentary for the ISEAS – Yusof Ishak Institute, Dr Yanuar Nugroho, who was deputy chief of staff to President Joko, says his recent picks may not necessarily be the best people for the jobs they were handed.
Politics, it appears, has taken priority.
For instance, handing the trade portfolio to Mr Zulkifli Hasan, chairman of the National Mandate Party, is not likely to guarantee any significant breakthroughs in this sector as he practically has no technical experience in dealing with trade issues.
On many occasions, Mr Jokowi has said that his ministers must possess a sense of crisis.
Yet, in this reshuffle, he seems to have prioritised political consolidation over technocratic capability.
Read his views here.
