The Asian Financial Crisis: The Challenge for Social Policy

Citation

Chatterjee, S. (2000), "The Asian Financial Crisis: The Challenge for Social Policy", International Journal of Social Economics, Vol. 27 No. 11, pp. 1132-1141. https://doi.org/10.1108/ijse.2000.27.11.1132.2

The financial and economic crisis that rocked some of the most successful of the South East Asian economies from late 1997 onwards has been the subject of many studies. Some of these studies have examined the causes of the crisis; some others have gone on to assess its effects on the living standards and livelihoods of large numbers of people both in the economies directly affected by the crisis and elsewhere. The present book does both of these things.

While the worst of the crisis may be over, and at least some of the economies may have begun to re‐emerge, the impact of the crisis continues to reverberate around the global economy. Naturally enough, having studied the crisis, policy‐makers and other observers began paying attention to the question as to what should be done to minimise the impact of the crisis, and, more importantly, how to prevent such crises in the future. The present book offers a diagnosis of the crisis, studies its impact and also offers practical suggestions for preventing a recurrence.

The coverage of the crisis begins with a prelude, followed by an examination of the nature of the crisis, and the factors leading to it, and ends with the outlook for 1998. While the coverage is adequate and generally well‐presented, there is not a great deal in it that can be regarded as “new” or original. The role of the International Monetary Fund (and possibly also the World Bank) in promoting the “success” of these countries, and in encouraging other countries to emulate them could have been explored more critically, and somewhat more extensively.

The social impact of the crisis is viewed mainly in terms of the increase in unemployment and in poverty, with brief references to the effects of increased poverty on health and other areas of social well‐being. Again, while it is appropriate that more space is given to discussing unemployment and poverty, the effects of the sudden fall in the standard of living of such a large group of people in South East Asia on their access to social capital, and, through that, on their future participation in their communities is a theme that could have been pursued more thoroughly. The International Labour Organisation which has sponsored this publication is an official body that has a wealth of information on social issues affecting different countries. A better use of this data would have made the book even more useful.

The book’s discussion of the social costs does go into the issue of social institutions in these countries, and how they may be re‐positioned to be more effective. The question of the norms and values of individual cultures, and the universality of “human values” is a theme that has attracted the attention of politicians, activists and intellectuals alike in recent times. This book touches on the theme, but confines the application of the principles underlying it principally to the industrial relations practices of some of the countries affected by the crisis. This is a pity, because a fuller exploration of this theme would have helped keep the debate on the issue alive by taking it to the many readers of the book.

The practical issues connected with employment promotion and the provision of a social safety net are discussed in the final few pages of the book. The author does emphasise the folly of the argument often advanced by the adherents of an unfettered “free market” that economic development itself would take care of the social problems. The crisis in South East Asia provides a timely reminder that the state does have a positive and benign role in ensuring social justice in all societies. This book makes a contribution by drawing attention to the need to address the societal aspects of economic changes that affect human welfare in good ways and bad.