Strategies for structural adjustment : the experience of Southeast Asia

213 Pages·1990·31.78 MB·English

by  Ungku Abdul Aziz (ed.)

STRATEGIES FOR
STRUCTURAL ADJUSTMENT
The Experience of
Southeast Asia
©International Monetary Fund. Not for Redistribution
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©International Monetary Fund. Not for Redistribution
STRATEGIES FOR
STRUCTURAL ADJUSTMENT
The Experience of
Southeast Asia
Moderator
Ungku A. Aziz
Papers presented at a seminar held
in Kuala Lumpur, Malaysia,
June 28-July 1, 1989
INTERNATIONAL MONETARY FUND
BANK NEGARA MALAYSIA
Washington • 1990
©International Monetary Fund. Not for Redistribution
© 1990 International Monetary Fund
Cover design by IMF Graphics Section
Library of Congress Cataloging-in-Publication Data
Strategies for structural adjustment : the experience of Southeast Asia
papers presented at a seminar held in Kuala Lumpur, Malaysia, June 28-
July 1, 1989 / moderator, Ungku A. Aziz.
p. cm.
Includes bibliographical references.
ISBN 1-55775-147-1
1. Asia, Southeastern—Economic policy—Congresses. 2. Eco-
nomic stabilization—Asia, Southeastern—Congresses. I. Abdul Aziz,
Ungku, 1922- . II. International Monetary Fund. III. Bank Negara
Malaysia. IV. Title: Experience of Southeast Asia.
HC441.S76 1990
338.959-dc20 90-5296
CIP
Price: US$16.50
Address orders to:
International Monetary Fund, Publication Services
700 19th Street, N.W., Washington, D.C. 20431, U.S.A.
Telephone: [phone]
Telefax: [phone]
Cable: Interfund
©International Monetary Fund. Not for Redistribution
Foreword
Southeast Asia's rising prominence in the world economy raises
many questions regarding the economic policies followed by individual
countries of the area. The Fund is pleased to have been a cosponsor
with the Bank Negara Malaysia of a seminar that addressed such
questions.
The seminar, held in Kuala Lumpur, Malaysia, on June 28—July 1,
1989, provided a forum for a dynamic exchange of ideas based on
papers presented by Fund officials, officials from nongovernmental
organizations, and academicians. Royal Professor Ungku A. Aziz
moderated the seminar and deftly balanced the proceedings so all
who wished to had the opportunity to express their view.
The individual successes of such a politically and economically
diverse group of countries provided many insights into structural
adjustment and proved, once again, that economic policies followed
by one country will not necessarily work for another.
MICHEL CAMDESSUS
Managing Director
International Monetary Fund
V
©International Monetary Fund. Not for Redistribution
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©International Monetary Fund. Not for Redistribution
Acknowledgement
The far-sighted wisdom of the International Monetary Fund in
planning and organizing a series of seminars on themes related to
structural adjustment sowed the seed for this report. The willingness
of Bank Negara Malaysia to participate in its realization ensured a
rich exchange of ideas.
This seems to be the appropriate place for me to record the
gratitude of all the participants to these two institutions for providing
the ingredients that made possible whatever results this seminar has
achieved. In carrying out my tasks I have benefited from the excellent
cooperation and courteous responses that made the work of the
moderator feel much lighter than it really was. Personally, I am
indebted to Azizali F. Mohammed from the Fund for his encourage-
ment and guidance at every stage.
The seminar was ably coordinated by Graham Newman of the
Fund and Jaafar Ahmad and Md. Khir Abdul Rahman of Bank
Negara Malaysia. Juanita Roushdy of the Fund put the manuscript
into published form. My secretary, Violet Fernando, bore the brunt
of scripting the taped records and the preparation of several versions
of the final text. Without her patient perseverance, it would have
been difficult to meet deadlines.
For all that I have learned I am grateful.
UNGKU A. AZIZ
Moderator
vii
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©International Monetary Fund. Not for Redistribution
Contents
Foreword V
Acknowledgement vii
Contents viii
1 Introduction and Summary
UNGKU A. AZIZ 1
2 Opening Address
LIN SEE YAN 12
3 Economic Adjustment, Financing, and Growth in
Southeast Asia During the 1980s
BERNARDO M. VILLEGAS 16
Comment by Tan Tat Wai 39
4 The Role of Fiscal and Monetary Policy in The Growth
Process
RICHARD HEMMING and KALPANA KOCHHAR 45
Comment by Tanya Sirivedhin 67
5 Trade Policy as a Strategy for Structural Adjustment
SUHADI MANGKUSUWONDO 72
Comment by Mohamed Ariff Abdul Kareem 95
6 Exchange Rate Policies and Managements: A Model for
Successful Structural Adjustment
PETER QUIRK 99
Comment by Bongsung Oum 127
7 Export Volatility and Stabilization in Malaysia
JAAFAR AHMAD 130
Comment by Azizali F. Mohammed 154
ix
©International Monetary Fund. Not for Redistribution