Skills and Upgrading in Southeast Asia
Chapter 8: The Asian Financial Crisis and Technical Intellectual Capital Formation
8. The Asian financial crisis and technical intellectual capital formation Up until the early part of 1996, the countries of Southeast Asia had experienced some of the fastest economic growth ever recorded. But just as rapidly as this happened, it all came to an abrupt end in 1997. Beginning with Thailand, the region plunged into the greatest economic decline since the great depression (Krugman, 1999). This chapter looks at the effects of this crisis and its aftermath on the formation of technical intellectual capital in the three countries, with particular attention paid to Thailand. Thailand was the country hardest hit and hence, we would assume, based on the theory, most likely to change. Did the Asian financial crisis represent a new critical juncture during which institutions could be formed or reformed to shape the creation of technical intellectual capital? Clearly the crisis exerted hard budget constraints on all three countries, the same influence as would be experienced through a scarce resource endowment. But how did constrained resources influence institutional change within the context of existing institutional systems? And perhaps most intriguing, could we expect more ordinal relationships between resources, vulnerability and institutional outcomes? To give an overview of the chapter’s findings, in Malaysia and Thailand the initial severity of the crisis created pressures to reorient coalitional structures. But the relatively short duration of the crisis meant that these reorderings were not permanent and coalitional politics quickly returned to previous configurations and operations. Thus, although policy change was widespread, implementation was...
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