Capital offence

Indonesia's crisis was caused by global 'market forces', transforming nation-states into commodities. The major lesson to be drawn from the region's economic trauma lies not in the evils of crony capitalism, business-government collusion, or the need for greater 'transparency' in economic activities. It does not lie in the domestic Indonesian scene at all, but in the changing international economy. I am not attempting to defend the Indonesian government. Rather I want to unravel some of the factors that caused the crisis and that are likely to have profound and long-lasting implications for governments of all types. Although the concept of 'globalisation' has become something of a cliche, it is a useful shorthand for an array of changes that seem to characterise the contemporary era. As far as nation-states are concerned, the most significant aspects of the process are political and economic. Non-state actors like the International Monetary Fund (IMF) enjoy increased influence, and therefore necessarily reduce the autonomy of national governments. Meanwhile the organisation of economic activity has undergone great changes which constrain national policy options