The U.S. financial crisis has spread around the globe. Financial globalization means that most countries and regions are not immune to the contagious effects of a financial crisis that originates in one country.

East Asian countries had already experienced the contagious effects of a financial crisis in 1997. That year, a financial crisis that broke out in Thailand and Indonesia reached Malaysia and then South Korea. Each of these countries reacted differently to the crisis. South Korea, Indonesia, and Thailand accepted International Monetary Fund (IMF) conditionalities that required neoliberal economic restructuring in return for emergency loans, while Malaysia rejected the IMF offer and instead encouraged the inflow of speculative financial capital, while reforming the banking and financial system. In the aftermath of the East Asian financial crisis, regional economic, financial and security cooperation were discussed among East Asian countries. These efforts resulted in the Chiang Mai Initiative, the Bond Initiative, the East Asian Summit, the Shanghai Cooperation Organization, and the Six Party Talks.

Thus, regionalism in East Asia was revived in response to external shocks, such as global financial volatility, endogenous opportunities such as East Asian market compatibility (Pempel, 2008), endogenous security threats such as the North Korean nuclear development, and exogenous opportunities such as "bringing in the U.S." (Pempel, 2008).

Nonetheless, East Asian regionalism is still at a low level of institutionalization compared to Europe. East Asian regionalism is still basically "bottom-up, corporate (market)-driven regionalism" (Pempel, 2005). 

I will discuss the obstacles and the opportunities that Northeast Asian countries are facing since the end of the Cold War and the advent of globalization.

Hyug Baeg Im is Professor at the Department of Political Science and International Relations, Korea University, Seoul, South Korea. He is Dean at the Graduate School of Policy Studies and Director at Institute for Peace Studies. He received B.A. in political science from Seoul National University, M.A. and Ph.D. in political science from the University of Chicago. He was visiting professor at Georgetown University (1995-1996), Duke University (1997), Stanford University (2002-2003) and visiting fellow at International Forum for Democratic Studies, National Endowment for Democracy, Washington DC (1995-1996). He served as a presidential adviser of both Kim Dae Jung and Roh Moo Hyun presidency. His current research focuses on the impact of IT revolution and globalization on Korean democracy. His publications include “The Rise of Bureaucratic Authoritarianism in South Korea,” World Politics, Vol. 34, No. 2 (1987), “South Korean Democratic Consolidation in Comparative Perspective” in Consolidating Democracy in South Korea (Lynne Rienner, 2000) and “’Crony Capitalism’ in South Korea, Thailand, and Taiwan: Myth and Reality,” (co-authored with Kim, Byung Kook) Journal of East Asian Studies, Vol. 1, No. 1 (2001), “Faltering Democratic Consolidation in South Korea: Democracy at the End of Three Kims Era” Democratization, Vol. 11, No. 5(2004), “Christian Churches and Democratization in South Korea” in Tun-jen Cheng and Deborah A. Brown (eds.), Religious Organizations and Democratization: Comparative Case Studies in Contemporary Asia (M.E. Sharpe, 2006) and “The US Role in Korean Democracy and Security since Cold War Era,” International Relations of the Asia Pacific, Vol. 6, No.2 (2006).

Korea introduced three major health-care reforms: in financing (1999), pharmaceuticals (2000), and provider payment (2001). In these three reforms, new government policies merged more than 350 health insurance societies into a single payer, separated drug prescribing by physicians from dispensing by pharmacists, and attempted to introduce a new prospective payment system. The change of government, the president’s keen interest in health policy, and democratization in public policy process toward a more pluralist context opened a policy window for reform. Civic groups played an active role in the policy process by shaping the proposals for reform —a major change from the previous policy process that was dominated by government bureaucrats. However, more pluralistic policy process also allowed key interest groups to intervene at critical points in implementation (sometimes in support, sometimes in opposition), with smaller political costs than previously.

Strong support by the rural population and labor unions contributed to the financing reform. In the pharmaceutical reform, which was a big threat to physician income, the president and civic groups succeeded in quickly setting the reform agenda; the medical profession was unable to block the adoption of the reform but their strikes influenced the content of the reform during implementation. Physician strikes also helped them block the implementation of the payment reform. Future reform efforts in Korea will need to consider the political management of vested interest groups and the design of strategies for both scope and sequencing of policy reforms.

Soonman Kwon is Professor of Health Economics and Policy, and Director of the BK (Brain Korea) Center for Aging and Health Policy in Seoul National University, South Korea. After he received his Ph.D. from the Wharton School of the University of Pennsylvania, he was assistant professor of public policy at the University of Southern California in 1993-96. Prof. Kwon has held visiting positions at Harvard School of Public Health (Fulbright Scholar and Tekemi Fellow), London School of Economics (Chevening Scholar), Univ. of Trier of Germany (DAAD Scholar), and Univ of Toronto. He is on the editorial boards of Social Science and Medicine (Elsevier), Health Economics Policy and Law (Cambridge U Press), and Health Systems in Transition (HiT, European Observatory). He has occasionally worked as a short-term consultant of WHO, ILO, and GTZ (German Technical Cooperation) on health financing and policy in China, Cambodia, Lao PDR, Malaysia, Mongolia, Pakistan, Philippines, and Vietnam. He has also been a consultant of Korean government for the evaluation of its development aid programs in North Korea, Ecuador, Fiji, Mexico and Peru.

Three decades of economic reform in China have created expectations of political change to follow. However, neither the Chinese Communist Party nor China's capitalists are following this script. The CCP has strengthened its support for the private sector and integrated capitalists into the existing political system. China's capitalists have shown little interest in promoting democratization. Many are dependent on the state for their success, and have shared interests, personal ties, and common views on a range of policy issues. Rather than being potential agents of change, China's entrepreneurs are proving to be a key source of support for the party's agenda.

Bruce Dickson received his B.A. in political science and English literature, his M.A. in Chinese Studies, and his Ph.D. in political science from the University of Michigan. He joined the faculty of The George Washington University and the Elliott School in 1993. He teaches on China, comparative politics, and democratization. Professor Dickson is currently examining the political consequences of economic reform in China, and in particular the relationship between private entrepreneurs and the Chinese Communist Party.

Dr. Dickson is the author of Wealth into Power: The Communist Party's Embrace of China's Private Sector (2008), Red Capitalists in China: The Party, Private Entrepreuneurs, and Prospects for Political Change (2003), Democratization in China and Taiwan: The Adaptability of Leninist Parties (1997), and is co-editor of four other books. His articles have appeared in Asian Survey, China Quarterly, Comparative Politics, Comparative Political Studies, Journal of Contemporary China, Journal of Democracy, National Interest, and Political Science Quarterly. He is a frequent commentator on political developments in China and Taiwan and on U.S.-China relations, and has appeared on CNN, NPR, BBC, and VOA.

This talk is part of the Stanford China Program Winter 2009 China Seminar Series titled "30 Years of Reform and Opening in China: How Far from the Cage?"