Asian and global financial crises : consequences for East Asian regionalism

This paper provides a comparative study of the consequences of the Asian and global financial crises for East Asian regionalism. It explains how and why the effects of the two crises on regional institutions were divergent and the differences derived from the origins of the two upheavals, internal versus external to the region. This generated contrasting expectations of how regional institutions might respond, which led in turn to diverse perceptions on the need for institutional change. While the events in 1997/8 were regarded as an “internal” crisis that regional institutions should have helped to rectify, the financial turmoil in 2008 was perceived in East Asia as an external development that existing regional institutions could not reasonably have been expected to address. Resulting from these contrasting readings of the two financial crises, the outcomes for East Asian regionalism have been equally different. The Asian financial crisis underscored the need for new overlapping arrangements capable of better defending the region against future financial instability. The less severe crisis affecting East Asia in 2008, in contrast, has led to a more dispersed and nationally driven institutional response. The competing proposals have been driven more by a perceived shift in the global power distribution than by any renewed or reinforced sense of regional vulnerability or common identity