This paper situates the recent problems in Indonesia in a more general framework that is called the paradox of free-market democracy. The basic thesis advanced is as follows. In Indonesia, as in many developing countries, class and ethnicity overlap in a distinctive and potentially explosive way: namely, in the form of a starkly economically dominant ethnic minority--here, the Sino-Indonesians.
Six years ago, Korea was in trouble. Its banking system, inadequately supervised,collapsed. Industry,lac king financial discipline,expanded unproductively with its "too big to fail" private firms crowding out smaller rivals. Labor market rigidity weakened the competitive position of Korean industry. The financial crisis that resulted gave rise to hopes that significant reform would address all three dimensions of Korea's vulnerability.
The export-led growth model for emerging economies is driven by their need to service external debt and build foreign exchange reserves. It has foundered in the aftermath of financial crises characterized by collapsing currency and asset values, widespread bankruptcies in real and financial sectors, rising unemployment, and negative growth rates. This report addresses the issue of building the financial infrastructure for emerging middle-class economies.
This report suggests that the control of capital in the developed world continues to shift away from private and state-owned institutions and toward public markets. Thereore, small and medium-sized firms with the best prospects for innovation and income/wealth generation need to be liberated from their dependence upon bank-based financial systems. They must also have the ability to turn to market-based systems with access to institutional capital providers at home and abroad.
China’s economic boom has dazzled investors and captivated the world. But beyond the new high-rises and churning factories lie rampant corruption, vast waste, and an elite with little interest in making things better. Forget political reform. China’s future will be decay, not democracy.
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The author examines Pakistan's complex role in U.S. foreign policy and advocates for a two-pronged approach that works to quarantine threats while integrating Pakistan into the broader U.S. agenda in Asia.