Financial Sector Reforms in Indonesia and South Korea in 1980s and Early 1990s

Abstract

This article examines financial liberalisation in Indonesia and South Korea during the 1980s and the early 1990s. It provides a brief discussion of the pre-reform political and economic environment in the two countries, followed by a description of the state of the pre-reform financial sectors in both the countries. The article then focuses on the respective financial development policies and their pace, sequencing and outcomes in the two nations. The socio-economic impact of financial sector reforms is also carefully considered. The article concludes by summarising its main findings and drawing out some major policy implications.