ABSTRACT

The region was shaken by the Asian economic crisis that began in Thailand in July 1997. This quickly spread to Malaysia, Indonesia and South Korea and triggered important political changes. In Indonesia, President Soeharto, who had led the nation since 1965, was forced out in 1998 during the turmoil caused by the crisis and East Timor’s bloody struggle for independence. In Malaysia, a show-down took place between Mahathir and his deputy Anwar Ibrahim. This culminated in 1998 with Anwar in prison, the birth of a pro-Anwar Reformasi movement, and gains in the 1999 election by PAS (Party Islam se-Malaysia). Dr Mahathir rejected the IMF’s offers of assistance during the crisis and went his own way, whereas Thailand

accepted IMF tutelage and then lived to regret it. A democratic new constitution was passed in Thailand in September, and Chuan Leekpai’s second Democrat administration replaced General Chavalit’s government in November. Singapore’s experience was different again, as it was relatively unaffected. One side-effect of the crisis was that the earlier ‘Asian values’ emphasis on Asian management superiority now seemed mistaken.