`How far have government interventions been a force for stability in the

economies of Southeast Asian countries?

Being responsible for central planning and decisions of the SEA countries
economy, the government plays an extremely important role in ensuring these
countries are guided into good economic development, initiating policies that will
benefit the economy in different way they see. To many governments, they are
considered good leaders as long as the country meet criteria like growth, low
inflation rate, economic equity, self-sufficiency and low unemployment rate.
However, that is not necessary so as to play the role of a good captain the
government must also be able to predict future outcomes their policies will bring
about, maximizing their benefits while minimizing the harm as much as possible.
For many countries, they tremendously as not only were many of their policies
ended up with numerous side effects, they were extremely short term and failed
in ensuring long term economic stability. In addition, the poor handling of
economic crisis by the governments resulted in the economy stability. In
addition, the poor handling of economic crisis by the governments resulted in the
economy being badly hit by the crisis. Therefore, the SEA governments largely do
not make good captains of the economy.
Governments can make good captains of economy as they are able to spot the
economic problems in the country and managed to implement policies to help in
economic development of the country in the direct direction. Under the good
steering of government, many SEA countries were able to experience substantial
positive economic growth. This would be one of key factors in determining the
success of an economy, as having a high GDP would mean that the country will
have a larger amount of national income in spending on various sectors.
Additionally, such national income can be able to be spent on infrastructures and
technological advancements, further attracting investments from foreign firms
and businessmen through better business confidence, and thus improving the
countrys economy further. In the case of Burma, Ne win identified the problems
regarding Burma economy. He implemented policies such the nationalization
program in almost every economic activity. Burma economy started to trade with
foreign companies. He implemented a series of laws such as Buma income-tax
amending law, enterprises nationalization law, imported commodities regulation
order to actually facilitate the nationalization of private enterprises. His aim is to
concentrate on the efficiency of the public sector while trying to liberalize foreign
trade to help in the boosting of Burma economy. By the early regimes, Burma
started to show economic development under Ne Win policies. It was achieving
an annual growth rate of 6.6%. Ne win also introduced the Whole township
special high yield paddy production program which greatly improved rice
production. The use of fertilizers, establishment of better credit facilities raised
the yield frfom 36.8% baskets per arce in 1976 to 67.98 baskets 1981. Thus by
identifying the economic problem that Burma is facing and by trying to come up
with policies to help alleviate the situation, no matter if the policies are
successful, it can be said that government make good captains of economy by
trying to help in the economic development of the countries. In the case of
Indonesia, under Suharto administration, he prioritized economic stabilization.
He implemented policies such as shifting production from agriculture to
enhanced role of trade in economy and monetization of the economy. So since
1966 growth had been impressive. It averaged 9% per annum and 8% in the
1970s. Inflation was also reduced to only 10% by 1969. Most of the population
had benefitted from rising living standards since the late 1960s. Social welfare
such as education, healthcare system had improved too. President Suharto had

thus received internal awards in recognition of the countrys success in food

production and family planning. Indonesia under his leadership managed to
achieve self sufficiency in this crop in the mid 1980s. Indonesia was held up as
model among the OPEC group in investing its oil revenues gains effectively and
in adjusting quickly to declining oil prices Suharto managed to achieve more
than the Dutch and Sukarno in areas of health, welfare, education. Economic
priorities shifted from stabilization to economic development. This clearly shows
how government makes good captains of economy by playing a role in the
economic development of the country.
However, on wider perspective, the government of SEA states still did not make
good captains for their respective economies due to their lack of capability to
guide their coutnries towards a long-term economic success. In many cases,
indeed, the governments implemented several policies so as to allow the
achievement of economic growth, equity and nationalism through a series of
central planning and state intervention. As a result, many SEA countries actually
managed to meet a short-term economic growth through examples such as
exapaning their countries primary and secondary industries, and attracting
investments in the forms of both FDI an increased financial liberalization.
However, in order to be good captains of economy, merely achieving good
economic growth in the short-term is insufficient. Many of these good
government were unable to foresee the underlying negative impacts that would
brought about in the long run. In fact, many of such policies were built upon
weak grounds that resulted in many economies being unsustainable. As such, for
the governments incapability to bring about a long term economic success, they
do not make good captains of the economy. In Burma, Ne Wins nationalization
program actually ended up bringing about more harm than good. Burma
nationalized several large corporations, such as the Burma Oil Company, Steel
Brothers and Anglo Burma Tin. However, many of such firms were foreign owned
previously, and thus local Burmese had almost no business and management
skills in these areas of expertise. Furthermore, the nationalization program also
constituted towards ensuring the government being the monopoly, controlling
both internal and external trades of Burma. However, such policy halted foreign
trades and investments. As a result, in the long-run, export revenue decreased
by almost 50% and import goods were also drastically reduced to consereve
foreign exchange, resulting in a decline in standard of living among the peope.
As a result, the government were not capable captains of the economy as even
though Burma was achieving positive economic growth, there was a significant
amount of foreign debt, increasing frokm 300miillion dollars to 1.78 billion
dollars. In the long run, this cann become a serious burden for Burma for the
next few generation to come. In Malaysia, in order to ensure the country
experiences good eocomic growth, the government implemented various
Malaysia Plans during a period of 1966 to 1980. The plans were meant to expand
and diversifying their domestic markets, preventing any fluctuationfrom
occurring. By expanding their agriculture sector, Malaysias rubber production
was able to account and contribute a significant amount of GDP and
employment. The manufacturing sector also grew at annual rate of 12% in the
1960s and 13% in the 1970s. Overall, GDP averaged about 7% annually inn the
1970s and 9% annually in the e1980s. However, the government was unable to
fit th role of a capable captain of the economy, as such economy growth was
built upon economic inequalities among different classes of people. Even though
policies such as the NEP were implemented to resolve it, there was still a
widening gap between the direct beneficiaries of the NEP and those Malays still
living in poverty. The average household income of Malays is still only half that of

Malaysian Chinese and two thirds that of Malaysian Indians. This would bring
about further negative impacts as social unrests and racial tension between the
Malays and Chinese in Malaysia would aggravate. From this, it is sown that
government failed as a captain as political instability can be detrimental towards
long-term success for an economy.
The governments in Southeast Asia do not make good captains of the economy
as they are not successful in handling the Asian Financial Crisis. Government
policiees suchc as liberalization program and attitude towards foreign investment
were partially responsible for the crisis. They were also plagued by corruption
and cronyism which contributed to the political instability, eventually affecting
the economy of these Southeast Asian coutnries. Hence, they do not make good
captains of the economy. In Indonesia, there was growing focus on poltics instead
on the economy. In 1997, in West Kalimantan, there were extremely violent
ethnic conflicts between the indigenous Dayak people and immigrant Madurese.
Later in May, there was ongoing election campaign for the Parliament against a
backdrop of violence. Thus, ther was a shift of focus on the politics than on the
economy, the poltical events did not seem to have any discernible impact on the
economy too. Corruption was plagued through Indonesia in 1998, making it
impossible for the government to reach decision on economic policies. The
ambitious agreement signing with the IMF aggravated more problems and issues
when Ssuharto dismissedseveral of the conditions attached to it which deeply
angered the Fund. The government and IMF sought to distinguish among banks
which were merely illiquid and those which were fundamentally insolvent with
high nin performing loans. 16banks were closed suddenly on 1997. However,
decisions for such closure were not rationalized and were too sudden. Thus it can
be seen that there were mismanagement of economic policies and the Indonesia
government does not make good captains of the economy as they were not
successful in reacting to the Asian Financial Crisis. In Thailand, the increasing
liberalization programs by the government and attitude towards foreign
investment resulted in the Asian Financial Crisis as there was too much robust
growth. The liberalization made entry and exit of froegin investment easier.
Foreign investment began pouring into the Thai eonomy. In its efforts to attract
more investments, the Bank of Thailand was attempting to maintain a fixed
exchange rate relative to the SU dollar. Due to this the longer the boom
continued, the more depleted thte reserves became and thus increases the
vulnerabilitiy to a crisis. Investing gin Thailand was deemed as safe and
profitable as the government was assuring the public that its reserves were
adequateto maintain its exchange rate. However, unrealistic expectations of
continued boom were the underlying fuel for this process and resulted in the
outbreak of the Asian Financial Crisis. The agreement signing with IMF was not
suitbale for AThailand as there was a massive contraction in private spending. At
a time when confidence in the financial sector was essential, the IMF required
that some financial institutions ot be closed.. Tthus it was seen tthat there
economic mismanagement between the government and IMF. Thai government
had been blae for not able to foresee the developing crisis in times, thus
resulting in the failure to cope with economic development. Hence, the Thai
government does not make good captian of the economy too.
Although the governments were able to identify the economic problems and
implement polcieis to alleviate the priblems, this short term success was further
offset by worse problems in the long run. They were unable to foresee the other
negative aspeccts ttheir policies may bring out. Such narrow-sightedness will be
a serious obstacle such SEA coutnries will face in the future if the government

does not alter their polcieis so that its impacts can be neficial and favouable for
the entire cocutnry. Furthermore, the capability of the governments worsened
due to the instbaiiliy which eventually put the whole country in a worse sate of
economy problem which is the Asian Financial Crisis. Thus it can be seen that the
governments were not good captains for the economy from their incapability of
meeting the demands of being one.

`How far have government interventions been a force for stability in the
economies of Southeast Asian countries?
Government intervention refers to the active involvement of the independent
Southeast Asian government in planning and implementing the various economic
development strategies, with the extent of government interventions differing
depending on the economic system adopted by Southeast Asian government
which ranges from the capitalist free market system to the communist command
system. A force for stability would mean that the Southeast Asian governments
were effective in establishing political, economic and social stability at home
through the generation of economic prosperity and achieving the equity and
nationalism. This essay seeks to argue that although government intervention
was the cause of instability in some countries, it had generally been a force for
stability.
For most Southeast Asian economies, government interventions have been a
force for economic stability because by devising the strategies to adopt so as to
bring in high economic growth, Southeast countries brought about great
improvement to their countries economic prosperity. For example in Singapore,
government-backed statutory boards like the Economic Development Board
(EDB), Housing and Development Board (HDB) and Port of Singapore Authority
(PSA) were set up to promote economic development and financial institutions.
Government long-term policy of pro-investment meant that there was minimal
reliance on the local private sector. As such, economic growth rates averaged 8%
from 1960 to 1999. In the late 1980s, real per capita income reached $75000 a
year, which was among the highest in the world and on par with many Western
nations. Likewise in Indonesia, from 1969 to 1973, the 1 st 5-Year Plan targeted
government investment in areas that were expected to produce the highest
economic returns. As such, by the end of 1980s, per capita income had
approached $600. Hence, government inventions in most Southeast Asian
economies have been a force for stability.

However, government interventions have been limited as a force for economic

stability because the strategies devised by the governments to bring in high
economic growth were at the expense of economic nationalism, making the
economic success susceptible to external influences. For example in Singapore,
due to the pro-FDI strategy, multinational corporations (MNCs) had a primary
share of the countrys net economic worth. Singapores open-door policy towards
trade and investment made her dependent to external actors, as proven by the
1980s global recession period where Singapores economic growth took a huge
beating. Likewise in