by Prabhat Patnaik
People’s Democracy | August 13, 2017
EXACTLY twenty years ago, a major financial crisis had hit the countries of East and South East Asia in July 1997. This crisis was a watershed in the history of third world development, in the sense that these “tiger economies” which had seen extraordinarily high growth rates until that time, remained permanently crippled thereafter. Just around the time that they were shaking off the effects of the 1997 crisis on their respective economies, the collapse of the “housing bubble” in the United States plunged the entire world capitalist system into a crisis which also affected them, so that they could never recapture their earlier growth trend.
The earlier growth performance of these Asian economies had been used by the World Bank, the IMF and the OECD (the rich countries’ club) to debunk the growth strategy pursued by India and a host of other third world economies in the immediate aftermath of decolonisation (what we call the “Nehruvian strategy”) which visualised delinking from world capitalism through trade and capital controls, and emphasised dirigiste development based on the domestic market, for breaking out of the colonial pattern of international division of labour. It was argued against such a strategy of “economic nationalism” that the Asian economies were doing remarkably well by hitching themselves to the global economy and eschewing dirigisme and controls.Read More »