Publisher: Cornell University Press
Reviewed by Amitendu Palit, Head (Development & Programmes) and Visiting Senior Research Fellow, Institute of South Asian Studies (ISAS), National University of Singapore (NUS)
Asia has not been the same since the economic crisis of 1997-98. Though the catastrophe was largely confined to East and Southeast Asia, the rest of the continent also felt the tremors, albeit in more piecemeal fashion. In the more affected parts of Asia, however, systems and institutions reacted sharply to the crisis though not always in sync with each other. Responses were not only economic, but had considerable socio-political implications as well. Post-crisis Asian economic architectures reflect clear differences when compared and contrasted with the past. Crisis as Catalyst (edited by Andrew Macintyre, T.J. Pempel and John Ravenhill) captures and analyses these various differences and changes in a sincere and meaningful manner.
The analyses in the book are particularly interesting since they appear close on the heels of the global financial crisis of 2008. In this respect, the volume is a useful addition to the literature examining outcomes of financial catastrophes from the political economy perspective. The nature and quality of responses for addressing vulnerabilities, as the book correctly argues, were different among different countries since they stemmed from diverse political economy circumstances. Nonetheless implicit commonalities were evident with reforms in domestic banking and financial systems being the best examples. In Chapter 3 (‘Banking Systems a Decade after the Crisis’), Natasha Hamilton-Hart’s analysis underlines financial sector reforms aimed at making regional systems more aligned to global norms and changes in ownership patterns as common and conspicuous responses across the region. This, however, is in contrast to Cohen’s findings of exchange rate regimes remaining fundamentally unaltered post-crisis.
The largest space in post-crisis literature has been occupied by Asia’s increasing intensity to connect within itself. Several institutional initiatives – notably the Chiang Mai effort, formation of the East Asian Summit (EAS), the ASEAN+3 grouping, and regional bond markets – all point to a more cohesive ‘Asia’ in the aftermath of the crisis. Jennifer Amyx and T.J. Pempel in chapter 6 (‘Regional Financial Cooperation in East Asia since the Asian Financial Crisis) and chapter 8 (‘Restructuring Regional Ties’) respectively provide detailed illustrations of various efforts. The book argues that systemic and institutional moves towards an integrated Asia were in addition to – and not in place of – the region’s Pan-Pacific links. This underscored the region’s dependence on US and European markets and the pragmatic effort to retain the links, notwithstanding the disappointment at the West not responding to the crisis as sympathetically as it was expected to. More perceptive, however, is John Ravenhill’s contention (Chapter 7; ‘Trading out of Crisis’; page 162) that post-crisis China has emerged as the key location for assembly of manufactures in the region. That again, has not happened at the expense of links with the global economy. This emerges as the focal contention of the volume: Asian regionalism post-crisis has been accompanied by an equally emphatic globalization.
The situation will probably change after the latest crisis, which is essentially of ‘trans-Atlantic’ origin. Will Asia still continue to globalise and regionalise at the same pace? Answers to the question will also have to factor in China’s acquiring a far more regionally significant dimension than what has been accommodated in the book. India has also emerged as a powerful economic entity in the region, which it was not during the Asian crisis. China in particular, and India, has begun playing more proactive roles in regional architectures than they did earlier. Indeed, the latest post-crisis response of the region has largely been fashioned by China and India. While none of the two would compromise on globalisation, they may impart a greater thrust to a more integrated Asia. Asian regionalism might assume a more concrete and exhaustive shape compared to the past.