THE POLITICS OF THE ASIAN CRISIS

The politics of the Asian crisis is analysed on the national, regional and global level. On the national level the financial crisis quickly led to a legitimacy crisis for the responsible governments, notably in the countries most badly hit: Thailand, South Korea and Indonesia. A reasonably smooth transition to new governments and policies in Thaila nd and South Korea demonstrated the advantage of having a democratic s ystem. In the longer run, however, there may be an anti-democratic bac klash should democratic governments be unable to get their countries o ut of the crisis. On the regional level, the crisis led to paralysis. It has demonstrated the weakness of Japan's position in the region, an d shown that regional organisations are unable to take significant ini tiatives in a crisis situation. From a regional security perspective t here has been a shift of power from the non-Chinese to the Chinese sta tes, but the crisis has also strengthened the leverage of the US and p ut a temporary halt to the challenge from 'Asian values'. On the globa l level, the crisis has reinforced US confidence in its own economic m odel, and has allowed the IMF to play an assertive political role both in relation to individual governments and to fora such as the G8. The crisis has demonstrated the need for institutional reform on the glob al level in order to create multilateral institutions with sufficient clout to prevent a highly liberalised global economy from entering a c ycle of booms and crises in the same way national economies used to do in the past. But can such organisations be democratic?