Malaysia in the New Millennium (B)

Abstract

This case series (see also the A case, UVA-BP-0441) brings to life a dramatic juncture in the modern economic history of Malaysia. The Asian Financial Crisis, triggered by the devaluation of the Thai baht in July 1997, required a policy response by the Malaysian leadership. The two cases highlight the decision of Prime Minister Mahathir to impose capital controls and limit economic austerity, a policy mix that defied the conventional wisdom espoused by the leaders of many developed countries. This defiant move followed a series of economic-development initiatives instituted by Mahathir that promoted rapid economic growth and economic equality across ethnic groups. The cases permit an exploration of national leadership, and also allow students to explore the interplay between exchange-rate regimes and capital-control policies on a technical level. This case series is intended for use in courses covering the political economy as it relates to the international business environment.

Keywords: economic development, exchange rates, international economics

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