Controlling Capital

Confronting Chaos: The Imperative of Reining in the Global Finance System

by Martin Khor

While much of Asia struggles through severe economic crisis, international financial institutions, development agencies and development experts are engaged in their own struggle over who and what policies should shoulder the blame for Asia's economic catastrophe. Although many prominent academics, such as Harvard's Jeffrey Sachs and MIT's Paul Krugman, have criticized International Monetary Fund (IMF) recessionary policies, most United Nations reports have focused primarily on the social aspects of the crisis, or describe the economic issues. Thus with the exception of dissident noises from the World Bank's Chief Economist, Joseph Stiglitz, most of the institutional economic analysis receiving wide publicity has come from the IMF.

In September, however, the United Nations Conference on Trade and Development, (UNCTAD) joined the debate in a powerful way with the release of its Trade and Development Report, 1998. It examines the causes of the crisis, locating these in the very system of global finance. It criticizes the IMF-led international response to the crisis. And it provides several proposals for the appropriate management and prevention of such crises. MORE >>

Regulation or Barbarism: The Case for National Economic Sovereignty

by Nicola Bullard

In 1996, $97 billion of private capital flooded into Thailand, Indonesia, the Philippines, Malaysia, and South Korea - the five countries most effected by the Asian Crisis. In 1997, the tide had turned, and these countries experienced an outflow of $12 billion. In net terms, that is an astounding $109 billion reversal of fortunes.

In contrast UNCTAD's latest Trade and Development Report notes that there has been virtually no change in levels of foreign direct investment in these same five economies from 1996-1997. The lesson is very simple, and is now gaining wide acceptance amongst the economic establishment, the G7, and even the IMF itself: uncontrolled speculative capital was one of the major factors in the Asian economic collapse, and is a threat to the stability of the national economies and to people and their livelihood. MORE >>

On the Russian Collapse

an interview with Boris Kagarlitsky

Boris Kagarlitsky, a prominent Russian scholar and activist, is a Senior Research Fellow in the Institute for Comparative Political Studies of the Russian Academy of Sciences. He served as an adviser to the Russian Parliament's Committee on Labor Relations in 1998 and as an adviser to the chair of the Federation of Independent Trade Unions of Russia from 1993 to 1995. He was a Deputy to the Moscow City Soviet from 1990 to 1993. He was a political prisoner from 1982 to 1983. MORE >>

In Defense of Capital Controls

an interview with Malaysian Prime Minister Mahathir Mohamed

On September 1, Malaysia announced the introduction of far-reaching capital controls. That day , Malaysian Prime Minister Datuk Seri Dr. Mahathir Mohamed participated in an interview on Malaysian television. The transcript of the interview originally appeared in the Malaysian newspaper, The Star, on September 2. The excerpted version reprinted here has not been edited for content, grammar or style.

Mahathir was interviewed by New Straits Times Press Group Editor-in-chief Datuk A. Kadir Jasin, Bernama Economic Service Acting Executive Editor Young Soo Heong and Public Bank Berhad's Director of Economics Division Nasaruddin Arshad. MORE >>