Comparative Analysis of Economic Policies in Korea and Malaysia after the Financial Crisis

Abstract

The Asian Economic Crisis of 1997 escalated from Southeast Asia and landed in Northeast Asia. However, in the process of recovery from the crisis, two countries took the opposite approaches. The Korean Government adopted the plans from the IMF and received a rescue fund, but the Malaysian Government adopted the independent recovery plans. With strong fundamentals, a generally liberal and continued integration approach into the global market-Mahathir's limited capital controls notwithstanding-Malaysia would probably see its economic recovery in relative good health again, even if with the 2-digit growth of the last decade. Therefore, this Malaysian Government's approach shows the importance of the self-supporting economy when confronting with the WTO's economic system and financial crisis. This study aims to evaluate after the financial crisis of the Korean economy with a special emphasis on the Korean government's structural reform efforts under the IMF program and Malaysia's capital control policy, it points out many issues of the Korean economy.