Lessons of the 1990s

Both quality and quantity of public debt are important dimensions in a financial crisis

In the last article I had argued that allowing liabilities to foreigners to grow beyond a limit can lead to financial colonisation by multilateral institutions such as the International Monetary Fund (IMF). This generally takes the form of “conditionalities” like tight monetary and fiscal policies the cost of which is too often borne by the poorest, who had little role to play in the creation of the liabilities. (It is worth noting that after the crisis Malaysia imposed capital controls, did not need to go to the IMF and recovered much more rapidly than the other three. The then Malaysian