Additional Lessons From 97 Implosion
a) You need not subscribe to IMF's prescription to survive well. Malaysia's strategy using capital controls worked well. However, Malaysia may have held onto the capital controls strategy for a wee bit too long - should have been better to remove it in early 2005. That would have hasten recovery and solidify the global competitiveness of value driven industries, instead of subsidising local natural resource / plantations companies.
b) Most of the affected Asian nations owe a huge huge debt to Japan. It is not Japan's style to demand bouquets or attention, but the mutual congratulations and backslapping going on in many Asian countries now that good economic times are back appear to be showing a lack of humility in many of Asian political leaders. Japan's Ministry of Finance provided US$42 billion in emergency funding to bail the affected Asian nations to ensure short term liquidity for the affected countries. The EU chipped in US$7bn while the US threw in US$12bn. We also should remember that at that time Japan was still in the midst of its 13 year prolonged bear market. We don't hear of the gratitude ... we hear of how each country did it his/her way ...
c) Broader understanding of FDIs. Some foreign direct investments are to stay, build industries and create jobs. Some came for a joyride.
d) An unspoken lesson learned by all Asian central bankers is how helpless US and EU central banks, the IMF and World Bank, collectively were in tackling critical global capital flow issues. Maybe they cannot help that much because its beyond their ability, or maybe the gravity of the problems were not high on their priority list. The 97 implosion quietly brought Asia closer together, of how interconnected their economies are, and the need to work together more to better withstand the cruel opportunistic financial players. The coincidental rise and rise of China as the outsourcing capital for the developed world actually "saved" a number of the affected Asian countries. The rise of China did not kill off the smaller developing Asian economies as some may have previously predicted. In fact, the indirect lessons were the importance of the reassuring quiet hand of Japan and robust economic engine of China, and how they brought Asia up swifter and closer together at the same time. Its not spoken much as it is regarded as politically-incorrect, but we all know better.