Microscope on the miracle - livemint

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it is no surprise that China has opted for an exchange rate- dependent, export-led growth model when its size and scale cry out for a domestic demand-led model. South-East Asian nations and China have something in common. They realize that a vibrant domestic economy with a strong and dispersed entrepreneurial class is a threat to established interests. Such an economy would see the fruits of success dispersed among many, not few. Hence, a strong domestically led economy is not encouraged. In these countries dominated by a few players and defined by narrow interests, corruption, cartels and conglomerates belonging to the oligarchs have combined to expropriate wealth from minority shareholders. A paper published in the American Economic Review in 2001 observed that the problems of East Asian corporate governance were more severe and intractable than suggested at the time of the financial crisis. Without credible regulatory reforms, the risk is that South-East Asia will go the way of Latin America, a region that continues to perform well below its potential. Once the recent, uninterrupted, unprecedented global growth becomes history, weak economic and societal foundations would come to the fore here.