Asia-Pacific Development Journal - Volume 10, Issue 1, 2006

Malaysia enjoyed high rates of growth in the early 1990s. The economic crisis that struck Malaysia in 1997 caught the country by surprise. Amidst the economic turmoil that shook the other South-East Asian countries, Malaysia ventured to adopt an unorthodox policy response to the crisis, choosing to implement a policy package consisting of a pegged exchange rate and capital controls. This paper argues that the package, which went against orthodox policy prescriptions, did offer a limited measure of certainty to export-oriented businesses in so far as they were protected against currency fluctuations. This paper also argues that the unorthodox policy had its costs. These costs include the decrease in FDI, lowered competitiveness, possibly weaker financial institutions and a lack of transparency in decision-making.

The paper analyses trends in fiscal decentralization in the two largest countries of the world — China and India. Both countries are in transition from a planned to a market system. The paper identifies the emerging challenges in achieving fiscal decentralization in the two countries. The challenges arise firstly from the transition to the market economy and secondly from the replacement of the old command and control systems with institutions developed to administer market-based policies and instruments. The paper argues that the approach to meet the emerging challenges has to be holistic and should deal with the sub-national budgeting system underpinning central fiscal control and not just the various components of the sub-national systems. The overall approach should ideally encompass all levels of government.

Using time series data, the paper analyses the economic structure of island countries. The results are illustrated using five case studies. It is demonstrated that countries pursuing strategies based on service industries or exports of light manufactures have been more successful in attaining development objectives. This success has been translated into improved welfare for the populations of these countries. In contrast, a promotion of agriculture and remittances has tended to have a negative effect on development and on levels of welfare of the relevant island countries.

Electronic commerce is a vital part of India’s trade facilitation policy. Following major initiatives in liberalization in 1991 the need to facilitate international trade through policy and procedural reforms has become the cornerstone of trade and fiscal policies. Electronic commerce, including electronic data interchange (EDI), has been implemented in various organizations in India, in particular those that are closely involved in international trade. It is known that the level of electronic commerce development in the organizations has been either facilitated or inhibited by various factors. In order to identify these factors an empirical study comprising a questionnaire combined with case studies and in-depth interviews in selected organizations was carried out. The results indicate that factors primarily intrinsic to the organizations and organization-driven strategies have been more significant causal factors than either network-driven strategies or factors extrinsic to the organizations in the implementation of e-commerce in India.

The paper reviews population trends in Japan with a view to showing that there has been substantial ageing of the Japanese population since 1950. The next 50 years will intensify this trend. The paper also analyses the economic consequences of this process and draws conclusions and lessons for the South-East Asian economies that are facing a similar demographic trajectory.