chapter  4
Global Capitalism and the Asian Financial Crisis
WithDouglas J. Sikorski
Pages 21

In the wake of the Asian Financial Crisis of 1997-98, Asians may be excused for some ambivalence about the phenomenon of 'globalisation' of production, markets, finance, and information. Most educated Asians aspire to play leading roles in the modern world order on an equal footing with Westerners, and of course they want to enjoy the opportunities of the global economy. According to The Economist, the causes of the Asian Financial Crisis might be interpreted in two ways: either a failure of Asian capitalism, or a failure of market capitalism that led to a loss of confidence in Asian capitalism. Marcus Noland identified 'four principal causes' of the Asian financial crisis: 'exchange rate misalignment', 'export slowdown', 'weak financial institutions', and 'moral hazard'. To better understand the potential for recovery, the chapter explores the main markets for debt and equity financing: commercial banks, bond and stock-markets.