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There’s a very good summary by Kishore Mahbubani, dean of the National University of Singapore in the Financial Times explaining why Asia has managed to apparently keep its head well above the flood gates of the global credit crisis. Complaining with some justification that the Western media has not commented very much at all on the reasons for Asia escaping the worst of the West’s excesses, he reminds us that U.S. and European policymakers are now doing exactly the opposite of what they told Asia to do during the parallel Asian Financial Crisis a decade ago: do not rescue ailing banks, raise interest rates, balance the budget, and avoid government interference.
Asia is indeed ten years to the wise in terms of what Western nations are now facing – the Chinese government itself had to deal with the newly acquired Hong Kong going into financial meltdown soon after the handover. It’s a sense of déjà vu for much of Asia. For more on the similarities, please see this 2point6billion.com article from earlier in October.
As Mahbubani points out in his article, Asian countries over the past decade have focused on liberalizing the financial sector slowly, borrowing in moderation, saving in earnest, taking care of the real economy, investing in productivity and focusing on educational development. It’s a thought provoking piece, and for readers interested in the differences in current fiscal ideology between the West and Asia, well worth investing five minutes of your time to read.
The author meanwhile has just published his new book, “The New Asian Hemisphere: The Irresistible Shift of Global Power to the East,” again, required reading in this age of shifting global power.
