s merely a symptom of a much deeper problem. The social and political assumptions on which the Asian model was founded are terribly outdated. The global economy is far too complex and fast paced for any bureaucrats to control. The only miracle in Asia is that this approach worked as long as it did. Some analysts have criticized Japan's economic system, since it has been the economic model for other nations in the region. "Japan is the villain," according to James Glassman, a fellow at the American Enterprise Institute, a conservative think tank in Washington, D.C. Glassman says that Japan's "command-and-control capitalism" is a disaster since investment decisions are determined by government officials rather than by the free market. If the normal mechanisms of a free market had been allowed to operate in Southeast Asia, he says, the region's current problems could have been avoided. The deals the IMF struck with Southeast Asia largely supported the view that the region needed to strengthen its free-market system in order to avoid similar crises in the future. In return for IMF financial support, South Korea, Indonesia and Thailand were forced to agree to reform their financial systems. They pledged to eliminate government influence over private-sector borrowing and to open their domestic markets to more foreign competition. South Korea also made a number of pledges to the IMF. First, they agreed to reduce public spending and to raise interest rates to discourage an over abundance of domestic investment. They also agreed to decrease the number of protectionist trade policies in order to allow an increased free market system. These reforms the IMF demanded were aimed at opening up Asian markets to more foreign competition and force corporations to make investment decisions based on market forces instead of on political influences. Many Western economists applauded the terms of the IMF deals. They feel these changes may help the world move...
