Causes of the Asian financial crisis of 1997 included low transparency in corporate governance, weak public governance systems, and collusion among the political, financial, and nontrade sectors in Southeast Asian countries. This project, focusing on corporate and public governance, the core of operation of the region's economic systems, conducted research on the institutional reforms essential for reviving corporate activity in order to achieve stable and sustained growth and for achieving public-sector reform and issued policy proposals. The grant recipient, Indonesia's Centre for Strategic International Studies, established a research group comprising nine experts that held regular coordination meetings and actively exchanged information.
In the first year, the group carried out research on the theoretical framework for building Asian-type governance systems. By exploring the problem points and areas for improvement revealed by different countries' government, corporate, and bank behavior around the time of the crisis, the group studied issues relating to governance, the way in which reform should be undertaken, the state of financial systems, the economic role of military regimes, and other relevant topics. At research coordination meetings progress reports were delivered and views on the content of the research exchanged. Further research building on these meetings generated recommendations urging the importance of establishing proper criteria and eliminating collusion.
This year, quantitative analysis and comparative case studies concentrating on governance in Southeast Asian countries on three levels--domestic, regional, and international--were carried out in line with the analytical framework constructed in the first year. The findings made it clear that reform of governance systems in Southeast Asian countries was inadequate, and a report was produced making the point that establishing strong, transparent institutions and laws were urgent priorities if the region was to deal with globalization. At an international conference, "Building a New Asia: Towards an Asian Economic Community," in New Delhi in March 2003 the project's findings were presented to opinion leaders and representatives of policymakers from the Asian region. A report on the project's findings, Governance and Asia's Corporations after the Crisis, is to be published commercially.