ABSTRACT
Southeast Asia’s economic crisis of 1997-98 prompted major changes in economic policy, including the lifting of barriers to foreign investment in previously sheltered industrial and service sectors. According to conventional analysis, the crisis and ensuing reforms have spelled the demise of government efforts to use strategic industrial policies to promote and guide industrialisation. Having surrendered their discretionary powers to regulate entry into key economic sectors, Southeast Asian governments must now allow international markets to guide them toward their natural comparative advantages.
