Anwar Nasution: I do not have much to comment on this excellent and well-written paper. This comment merely compliments the paper by describing the essence of stringent macroeconomic stabilization policy that has been adopted in East Asia, particularly in three countries (Thailand, Indonesia, and Korea) that were hit by the Asian financial crisis (AFC) in 1997. The policy has strengthened their economic performance and made them more resilient to global shocks and volatile capital flows.
As noted in the paper, the emerging East Asia countries have faced many external shocks since 2010 that have reduced their foreign exchange earnings and economic growth, increased inflation rates, enlarged external debt, encouraged capital outflows, and plunged currencies. First, the shocks are due to the slowdown in the global economy, particularly China, and has led to the sharp drop both in the demand as well as prices of their exports of primary products. Second,...