Abstract
The Asian Financial Crisis (AFC) ultimately shattered the East Asian economies, while the Global Financial Crisis (GFC) left these economies relatively unscathed. The different implications of the two crises in East Asia have created the rationale for a group of leading experts to compile 10 well-researched chapters into an edited volume by Pempel and Tsunekawa. The book comprises three main parts. The main argument advanced by Pempel in the first part argues that the GFC has had less impact on East Asia compared to the AFC. The second argument believes that East Asian economies are faced with challenges that could obstruct their continued growth.
The second part of the book consists of four chapters which aim to reinforce Pempel’s argument through the examination of case studies. Basri starts by arguing that it was good policies and some luck post-AFC that enabled Indonesia to ‘escape’ from the GFC. Chu maintains that Taiwan’s economic resilience in the GFC was fostered by greater regional integration in trade, finance and regulation. Both Okabe (chapter 5) and Naughton (chapter 6) agree that government intervention has reduced the effect of the GFC on Thailand and China, respectively.
The third part of the book addresses the possibility of a second miracle for East Asia, although the focus is on Southeast Asian countries. Despite successfully weathering the GFC, Pepinsky (chapter 7) and Doner (chapter 8) argue that Southeast Asia still faces many challenges that threaten its long-term sustainable growth. Tsunekawa contends that the inconsistency of Japanese policies was the result of the intense political competition which prolonged its economic stagnation. Last, Pempel and Tsunekawa conclude that it is less likely for East Asia to have a second economic miracle if these countries do not manage their domestic and regional problems appropriately.
The book’s contribution lies in its emphasis on the role of domestic factors in the economic resilience of East Asian economies. The editors should be commended for producing a highly integrated volume that sticks closely to its themes. However, there is no explicit justification for the case selection. It is not clear why the authors did not address the situation of some other Southeast Asian economies in the discussion. Nevertheless, the book makes a valuable contribution to the literature of political economy in East Asia and should be an essential read for academics and pundits interested in Asian politics and economics.