Crisis dynamics and regionalism: East Asia in comparative perspective

Abstract

This paper compares the current global financial crisis with the one that struck East Asia a little more than a decade ago. The analysis reveals some striking and surprising differences between the two periods. Whereas the first crisis had a catalytic impact on Asian regionalism this one may not. Despite East Asia generally and China in particular seeming to emerge stronger relative to the US from the current crisis, the impact of the second crisis on Europe reminds us that there is nothing inevitable about the course of regional integration. Not only are Europe's economic problems likely to diminish whatever enthusiasm there was for initiatives such as a common currency in Asia, but China may also find itself increasingly playing a global rather than a regional role. In short, crises can have very different impacts and provide an important insight into the interconnected dynamics of regional and global processes.

Keywords:

• crisis
• East Asia
• European Union
• regionalism
• United States

Acknowledgments

Mark Beeson is Winthrop Professor of Political Science and International Studies at the University of Western Australia. Before joining UWA at the beginning of 2010, he taught at the universities of Murdoch, Griffith, Queensland, York (UK) and Birmingham, where he was also head of department. Professor Beeson's work is centred on the politics, economics and security of the broadly conceived Asia-Pacific region. He is the author of more than 100 journal articles and book chapters, as well as numerous other publications. His latest books include Institutions of the Asia-Pacific: ASEAN, APEC and Beyond (Routledge, 2009), Securing Southeast Asia: The Politics of Security Sector Reform (with Alex Bellamy, Routledge, 2008), Regionalism and Globalization in East Asia: Politics, Security and Economic Development (Palgrave, 2007), and the recently published edited collection Issues in 21st Century World Politics (with Nick Bisley, Palgrave, 2010).

Notes

1. LTCM's strategy of fixed income arbitrage came unstuck when the Russian government defaulted on its loans in the wake of the Asian crisis, revealing LTCM as highly leveraged, unable to meet its obligations, and triggering a bail-out of the sort that has become so familiar in the latest crisis (see Lowenstein 2001).

2. This is not to say that no one raised the alarm. On the contrary, a number of observers pointed to the potentially unsustainable nature of economic development in the US, but such views were largely marginalised (see, for example, Brenner 2002).

3. Perhaps the most significant point in this context is not that this thesis exercised such a surprising influence for so long, but the underlying role played by the economics profession in uncritically legitimising a narrow set of abstractions that were at odds with empirical historical reality (see Colander et al. 2009).