Lessons from the past: a framework to explore the impact of liberalisation policies

We live in an age in which the world is becoming increasingly secularized and westernised, to such a point that soon society will cease to recognise individual cultures and sovereign borders, and ultimately we will cease to exist as individuals. While it is a frightening proposition, it is not as farfetched as it may seem. Globalisation has been a far-reaching paradigm that has shaped the international economic and political environment to such an extent that it is now quite feasible that the international community could be dominated by a single political economic system. Since the end of the Cold War, global economic governance institutions, such as the IMF, WTO and World Bank, have proliferated capitalist neoliberal ideology, in the form of liberalisation policies, and structural adjustment policies. While the effect of this trend has been most marked in East Asia post 1997, capitalist neoliberalism has been the defining feature of this century. Based on events in Asia, it is not hard to see why emerging countries continue to struggle against the dominant ideology. What is perhaps of greater significance is the way in which dominant global economic forces will shape the economic welfare of these economies in the future. The liberalising of institutions and the push toward greater deregulation and privatisation are most evident in South East and East Asian nations. This paper adopts a structuralist framework to explore the impact of liberalisation policies and investigate the role of future government intervention in shaping the political economies of Singapore and Hong Kong. The respective political responses of the two nations are characteristic of two types of approaches to foreign direct investment (FDI); one embraced deregulation and open markets, while the other took a more tempered view of economic governance institutions. The impact of these responses is explicitly evident in the economic position in which each of these nations now finds itself; moreover, decisions made following the crisis will directly impact the future economic welfare of Singapore and Hong Kong. It is important to compare these varying views of liberalisation, within a framework that analyses the impact of such policies on growth and their propensity for crisis.