The Political Economy Of Financial Development In Malaysia

Current inquiries into the political economy of financial policymaking in Malaysia tend to focus on the high-level drama of crisis politics or simply point to the limited impact of post-crisis financial reforms, given that politico-business relations have remained close. In so doing, pundits ignore a number of intriguing questions: what is the relationship between financial development and financialisation and how has it played out in the Malaysian context? And more generally: how can a country like Malaysia become significantly more financially developed, yet fail to emancipate the financial system from political control; a core element of the financial development discourse? To unravel the complexities of this puzzle, this book subjects the history and contemporary practices of financial policymaking in Malaysia to scrutiny. It argues that to understand financial development in Malaysia, its progress and reversals, it is important to conceptualise it as a political, rather than a merely technical process. In so doing, the book echoes a more profound concern in the political economy literature, namely the evolving relationship between states and markets, and the supposed retreat or reassertion of the state at a time of increasing (financial) globalisation. The book can generate further insights into the evolving role of the state with regard to broader processes of development and marketisation, as they relate specifically to finance.

This book is concerned with the role of financial intermediation in economic development and growth in the context of Malaysia. Using an analytical framework, the author investigates the Malaysian economy from 1960 onwards to examine how far financial development has progressed in the course of economic development, and whether it has been instrumental in promoting economic growth. A significant improvement in the Malaysian financial system, coupled with rapid economic growth and a rich history of financial sector reforms, makes Malaysia an interesting case study for this subject. The author shows that some government interventions seem to have impacted negatively on economic growth, whereas repressionist financial policies such as interest rate controls, high reserve requirements and directed credit programmes seem to have contributed positively to financial development. The analysis concludes that financial development leads to higher output growth via promoting private saving and private investment. Shedding light on the evolutionary role of financial system and the interacting mechanisms between financial development and economic growth, this book will be of interest to those interested in economic and financial development, financial liberalization, saving behaviour and investment analysis and Asian Studies.

This 1997 book is an insightful and accessible analysis of contemporary Malaysian business and politics. Using the concepts of rent and rent-seeking as tools to study the Malaysian political economy, the authors explore how political patronage influences the accumulation and concentration of wealth. The book considers the impact of party politics and economic development on the relationship between politics and business in Malaysia, and provides discussions of government-led change in Malaysia's business community, including the emergence of a Malay business class. In this revised edition, the authors examine how the 1997 Asian currency, liquidity and financial crises have impacted on Malaysia's economy. Their discussion canvasses various economic policy responses, including capital control measures, as well the ensuing economic recession and political turmoil.

The Asian crisis has sparked a thoroughgoing reappraisal of current international financial norms, the policy prescriptions of the International Monetary Fund, and the adequacy of the existing financial architecture. To draw proper policy conclusions from the crisis, it is necessary to understand exactly what happened and why from both a political and an economic perspective. In this study, renowned political scientist Stephan Haggard examines the political aspects of the crisis in the countries most affected—Korea, Thailand, Malaysia, and Indonesia. Haggard focuses on the political economy of the crisis, emphasizing the longer-run problems of moral hazard and corruption, as well as the politics of crisis management and the political fallout that ensued. He looks at the degree to which each government has rewoven the social safety net and discusses corporate and financial restructuring and greater transparency in business-government relations. Professor Haggard provides a counterpoint to the analysis by examining why Singapore, Taiwan, and the Philippines escaped financial calamity.

This book explores the way that forms of economic policymaking are sustained and challenged by everyday practices across Southeast Asia.

Malaysia has grown and changed a great deal since it was formed on 16 September 1963. It was then seen as an unlikely nation hastily put together as a federation of British controlled territories in the region. Brunei's refusal to join at the eleventh hour and Singapore's secession before its second birthday only seemed to confirm such doubts. Yet, it has not only survived, but even thrived, often cited as a developing country worthy of emulation. Ruled by the same ruling coalition since the mid-1950s, it has been tempting to emphasize continuities, and there certainly have been many. Looking back at its last half century, this volume first considers changes in development policy in response to national as well as international developments. The remaining three parts consider how public policy has been influenced by and has, in turn, influenced economic distribution, public finance and economic federalism. Besides the familiar focus on ethnic disparities, regional and other distribution issues are considered. The discussion of government taxation as well as spending also focuses on distribution implications. Although constitutionally a federation, Malaysia has been more centralized than most federal states. The way forward requires greater sensitivity to the complex political economy of Malaysia's unlikely, but nonetheless resilient federation and ruling coalition. This book is published and distributed worldwide by World Scientific Publishing Co Pte Ltd except Malaysia. Contents: Development Stages:The Alliance Era (1957–1969)The First Decade of the New Economic Policy (1970–1980)Mahathir's Three RegimesMahathir Regime 1: New Roles for the State (1981–1985)Mahathir Regime 2: Inducing Private Investments (1986–1997)Mahathir Regime 3: Crisis Management (1997–2003)After 1997After MahathirPolicy LessonsDistribution:Income DistributionPopulation and LabourEmployment StatusEducation and EmploymentWealth Ownership DisparitiesGender DisparitiesRegional DisparitiesPublic Finance:TaxationDirect TaxesIndirect TaxesGovernment ExpenditurePrivatizationFederalism:Formation of MalaysiaFederal and State Government JurisdictionsFederal-State Financial RelationsPublic AccountsExternal TradeLessons?:Development StagesDistributional StrugglesPublic FinancesMalaysian FederalismConcluding Remarks Readership: Academics, researchers, professionals, policy makers interested in economic development of Malaysia. Key Features:First book to focus on how public policy has evolved in response to economic development and distributional challenges in MalaysiaSpecial focus on the changing role of public finances and federal-state relations in the countryKeywords:Economic Development;Distribution;Disparities;Public Finance;Federalism;Malaysia