There is little gloating in Asia, even though some would be justified. In many ways, US and European policymakers are doing the opposite of what they advised Asian policymakers to do in 1997-98: do not rescue failing banks, raise interest rates, balance your budget. Millions of Indonesians and Thais would have been better off if their governments had been permitted to do what western governments are doing now. An apology from the west to Asia would not be inappropriate.
Nor are the Asians terrified. They learnt many valuable lessons from their financial crisis in 1998: do not liberalise the financial sector too quickly, borrow in moderation, save in earnest, take care of the real economy, invest in productivity, focus on education. Hence, while America was busy creating a financial house of cards, Asians focused on their real economies. This explains why the latest International Monetary Fund growth rate estimates for 2008 and 2009 for China are 9.7 and 9.3 per cent; and for India, 7.9 and 6.9 per cent respectively.
Equally importantly, Asian minds have never been captured by the strange ideological belief that markets know best and government should step aside. Most Asian policymakers are puzzled by former US president Ronald Reagan's statement: “Government is not a solution to our problem, government is the problem.” Alan Greenspan, former US Federal Reserve chairman, only recently admitted the folly of his ways when he acknowledged that lending institutions could not regulate themselves. By contrast, virtually all Asian governments believe that the virtues of the “invisible hand” in the market have to be balanced by the “visible hand” of good governance. This Asian emphasis on good governance may serve as a real asset in the storm.