Krugman: Asia was impressive but still human MIT Economics Professor Paul Krugman wrote an article "The Myth of Asia's Miracle" published in Foreign Affairs in 1994. In that article, he denounced the Asian miracle and believed that Asia's growth could not be sustained. During his visit to Singapore last month, he talked about the current Asian economic crisis and suggested some radical measures. The following is an abstract of his interview with Business Times. Q: In your 'Foreign Affairs' article, you argued that Asia's growth could be basically explained by high rates of investment. But how did that growth manage to be sustained for so long --close on 30 years? A: There were three things going on. The first was high rates of investment. The second was high rates of labour force growth. Finally, you had increases in education levels. So if you took into account those triple sources of growth, which were all measurable inputs, they somewhat surprisingly seemed to explain pretty much all of what had happened in Asia. There's nothing paradoxical about that: the mobilisation of resources was immense. Q: What were the earliest signs of things being wrong? A: The stuff I talked about in 1994 wasn't a sign of an impending crisis -- at least I didn't think so. But I suppose you could look at the indicators there and say there were signs there that Asia's growth at that pace was not sustainable. The first I began to see that some kind of crisis might be in the offing was some time in 1995 or early 1996, when I began to notice how similar the balance of payments developments were in South-east Asia to those in Latin America a couple of years before. Like a lot of people, I saw the very large current account deficits and the buildup of short-term debt and I thought: this looks awfully like Mexico and Argentina in 1993-94. And since I had already decided on the basis of my earlier work that Asia was impressive but still human and subject to the normal limitations that affect other countries, I began saying: Gosh, there could be a currency crisis here. But I never imagined that anything like what has happened could happen. Looking back, I think we didn't pay enough attention to the Mexican crisis of 1995. It was over relatively quickly, the rescue plan worked and we all kind of filed it away as just a blip -- a horrific blip, but still a blip. We really should have looked at it more closely because it was an indication that a new kind of economic crisis might be possible -- one that did not involve irresponsible monetary or fiscal policies and yet led to all hell breaking loose. Q: Why didn't the approach that worked in Mexico work in Asia? A: One reason was that Mexico was extremely fortunate, not just to have the US as a neighbour, but to have the US experiencing an unexpectedly vigorous expansion. And Asia has been unexpectedly unlucky by having Japan being a deadweight instead of a locomotive. The sheer scope of the crisis --- the fact that it wasn't just South Korea or Indonesia, but this whole arc of countries, with each country affecting the others -- was another feature. There were also issues of financial structure. The IMF strategy is designed for countries that have a basically sound structure -- it's a strategy of buying time and waiting for confidence to return. There were also technical issues: you had this bank-centred finance in Asia and very high levels of internal leverage. Now Mexico went through a period of extremely high interest rates -- 75 per cent for quite some time --- but many Mexican companies were able to weather them because they did not have such a high degree of leverage or a dependence on short-term internal loans. Indonesia or South Korea, for example, couldn't do that. So basically, everything that went right for Mexico went wrong for Asia. Q: So what's your radical prescription? A: It's something I hate to recommend, but I think Asian countries need some breathing space. They need the ability to reflate without having to constantly worry about satisfying capital market investor confidence. That means delinking the domestic capital market from the external capital market. It certainly means debt moratoria and probably currency controls on a temporary basis. Q: Would you also be suggesting this for an economy like Singapore, where domestic demand is relatively small? A: No. Singapore is a kind of odd man out here -- as, in different way, is Hong Kong. But Singapore would be a major beneficiary of a strategy along these lines, because it is a major service provider to surrounding economies. The prime candidate is Indonesia, which is playing a waiting game with no light at the end of the tunnel. That would be the most extreme case. Q: What's your worst-case scenario for Asia? A: Gosh, for Indonesia, the worst-case scenario is virtually bottomless. An absolute worst case would be radical political unrest and five million boat people. But leaving that aside -- and that's only amateur political futurology -- I think the worst case is a kind of early-1930s scenario in which the non-Japan Asian countries try desperately to adhere to financial orthodoxy and at the same time fail to generate the political credibility that will bring back investor confidence. At the same time, Japan slides deeper into a slump, and we see all the output declines of this past year repeated. Indonesia's slump in the last year is possibly the worst that any country not at war has ever had. It appears to be just about the same as the US in 1932. But what happened in 1932 wasn't in isolation; it was part of four consecutive years of catastrophe. So that would be my worst-case scenario: that in a few years, we would end up with output in South-east Asia being 30 to 40 per cent below what it was in 1997, with who knows what consequences. 克鲁格曼：亚洲成绩并非古迹 美国麻省理工学院传授及著名的经济学家克鲁格曼(Paul Krugman)，曾于1994年在《外交事务》发表一篇名为《亚洲古迹的神 话》的文章。他在这篇具争论性的文章里否认了“亚洲古迹”，并认 为亚洲无法连续恒久的经济增长。克鲁格曼上个月来新加坡时，针对 整顿亚洲经济危机，提出了的激进建议与观点。以下是他接受《商业 时报》会见的摘要。 问：你在《外交事务》的文章里指出，亚洲的增长根基上是大量 投资造成，但这个增长为什么能够连续这么久——接近30年？ 答：其时呈现三种现象：首先是大量投资的涌入，第二是高速的 劳力增长，最后是教育程度的提高，它们都是可计算的投入。令我感 到颇为意外的是，如果将这三重的增长因素加在一起，大抵上就可以 解释亚洲的成长；大量资源的动用是个无可争论的事实。 问：大势呈现问题的最初征兆有哪些？ 答：喂授1994年所提出的论点不是针对危机即将产生而做的预言 ，至少我不这么认为。不外，我想你可以从一些迹象中看出亚洲是无 法恒久维持那样的高速增长。 我第一次察觉危机即将光降是1995年间或1996年初的事。我发明 东南亚国家的出入平衡成长跟拉丁美洲几年前的环境很是相似。 同很多人一样，我有注意到巨额的常常帐目赤字以及短期贷款的 累积。我觉得这个现象同墨西哥和阿根廷从1993至1994年的环境实在 太相似了。按照我较早的研究，我已经断定亚洲国家的成绩固然骄人 ，但并非什么古迹，所以碰面对跟其他国家一样的限制，因此我其时 暗示：糟了！亚洲可能产生钱币危机！可是近来事态的转变却是我当 时万万意想不到的。 回首已往，我认为我们对1995年的墨西哥危机不足重视。由于当 时的拯救打算行得通，所以危机相当快便结束。因此各人都把它当成 短暂性的颠簸——尽管颠簸幅度很大，它却是暂时的。我们其实应该 越发仔细地检讨问题，因为那是一种新式经济危机可能发生的迹象： 一种不是因为不卖力任的钱币或财务政策而发生的灾难性危机。 问：为什么在墨西哥危机中所采纳的计谋这次在亚洲却行不通？ 答：个中一个原因是墨西哥其时很是幸运，不单有美国这强大邻 国辅佐，又正好碰上美国一次出人意料的蓬勃经济扩展。亚洲则出格 不幸：日本不单无法成为一股敦促苏醒的力量，反而加重了亚洲负荷 。另一差异处，是这次危机所波及的范畴很广，不光是韩国或印尼受 影响，整个区域的国家都被牵连，并且一个国家的问题会影响到其余 国家。 别的，另有金融布局的问题。国际钱币基金组织的计谋只适合结 构稳固的国家，它是一个拖延时间以期待信心规复的计谋。另一个关 键则是技术性的问题：亚洲的融资以银行贷款为主，国内的欠债率也 很高。墨西哥曾一度实行高利率政策，利率有相当长时间保持在75% 的程度。不外很多墨西哥公司都能蒙受这样高的利率，因它们的欠债 率没这么高，也不会那么依赖国内的短期贷款。可是像印尼或韩国等 （亚洲国家），就不能效仿这种做法。因此，现代职业教育，对墨西哥有效的计谋在 亚洲根基上都行不通。 问：那么你建议的激进计谋是什么？ 答：我很不喜欢这个建议，但我觉得亚洲国家需要一些呼吸的空 间。亚洲必需取得通货回胀，却不能时时顾及投资者对资金市场投资 信心的需求。这暗示亚洲国家必需隔离国内资金市场与对外资金市场 的连系。这意味着有须要延迟送还债款的期限，或者也有暂时实行货 币管束法子的须要。 问：新加坡的国内需求比力小，你会建议像新加坡这样的经济体 系同样采纳你的计谋吗？ 答：不会。新加坡是个非凡例子，从差异的角度看，香港也是。 但是若类似的激进计谋被其他国家回收，新加坡将会成为最大受益国 ，因为新加坡是邻近经济体系的重要处事供给国。印尼是实行计谋的 主要工具，因为它目前正在打一场乐成但愿渺茫的仗，但那将是最极 端的环境。 问：你认为在亚洲可能产生的最恶劣情形会是怎样？ 答：我看对印尼而言，大势恶化的水平的确是无止境的。最恶劣 的环境，就是产生激进的政治动乱，以致500万难民四处逃亡，不外 这只是我对未来政治大势的浅薄观点。撇开这个不说，我认为最糟的 环境，是呈现类似30年代初期的场面：除了日本以外，其他亚洲国家 都拼命严守正统的金融系统，却无法树立政治可信度以博回投资者的 信心。与此同时，日本将陷入更深的经济衰退困境；今年各方面所经 历的生产量衰退环境将会重现。 印尼已往一年的衰退，是有史以来非战乱国家所遭受的最严重经 济冲击。美国在1932年好像也经历过同样的困境，但那不是伶仃事件 ，而是持续4年的灾难的一部门。我预测的最糟情势将是如此：在几 年的时间内，东南亚的产量比1997年的少30至40%，到时的结果将不 堪设想。
