Prior to the Asian crisis, there existed a perceived process of economic and policy convergence in Asia generally and in ASEAN particularly
In the post-crisis era, some have argued that this convergence is breaking down. The goal of this paper is to test this latter hypothesis, using a comparison of Malaysia and Thailand as a case study.
Malaysia and Thailand are excellent candidates for such a comparison, in that each appeared to share a common policy stance prior to the crisis and experienced common results: rapid growth, strong macroeconomic fundamentals, reduction in poverty: brief, economic development. In fact, they constituted the backbone of the ‘ASEAN Success Story’ and graduated to the ranks of ‘Dynamic Asian Economies’ (DAEs) in the late 1980s/early 1990s. However, during the crisis and so far in the post-crisis era, there is a common impression that policy and economic convergence may be going in opposite directions. If so, this could have important implications for economic development in the region, as well as international policy initiatives.
Hence, this chapter focuses on questions surrounding ‘real’ and policy convergence between Malaysia and Thailand in the context of economic interdependence and co-operation. In order to do this, we begin by defining what is meant by ‘convergence’, proposing various indicators and followed by an application to the cases of Malaysia and Thailand. As the questions surrounding ‘convergence’ between Malaysia and Thailand tend to be more on the policy side, we focus much of the paper on this area.
Prior to the Asian crisis, there existed a perceived process of economic and policy convergence in Asia generally and in ASEAN particularly In the post-crisis era, some have argued that this convergence is breaking down. The goal of this paper is to test this latter hypothesis, using a comparison of Malaysia and Thailand as a case study. Malaysia and Thailand are excellent candidates for such a comparison, in that each appeared to share a common policy stance prior to the crisis and experienced common results: rapid growth, strong macroeconomic fundamentals, reduction in poverty: brief, economic development. In fact, they constituted the backbone of the ‘ASEAN Success Story’ and graduated to the ranks of ‘Dynamic Asian Economies’ (DAEs) in the late 1980s/early 1990s. However, during the crisis and so far in the post-crisis era, there is a common impression that policy and economic convergence may be going in opposite directions. If so, this could have important implications for economic development in the region, as well as international policy initiatives. Hence, this chapter focuses on questions surrounding ‘real’ and policy convergence between Malaysia and Thailand in the context of economic interdependence and co-operation. In order to do this, we begin by defining what is meant by ‘convergence’, proposing various indicators and followed by an application to the cases of Malaysia and Thailand. As the questions surrounding ‘convergence’ between Malaysia and Thailand tend to be more on the policy side, we focus much of the paper on this area.
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