Since the 1970s, western economists have paid more and more attention to the theory of financial reform in view of the lagging financial development in developing countries. Under the guidance of this theory, many developing countries have successively reformed and deepened their financial systems. Although the financial reform in developing countries and regions in Asia started late, due to the relatively safe and pragmatic approach adopted by various countries, great achievements have been made, showing a good momentum of mutual promotion between economic growth and financial development. This paper will briefly analyze the financial reform and development process of developing countries in Asia.
First, the characteristics of the original financial system in developing countries in Asia
After World War II, developing countries in Asia have taken the development of production and industrialization as the primary tasks of their economic development strategies. In the process of economic development, Asian countries, like many other developing countries, also encounter the problems of insufficient domestic funds and construction funds. At that time, many countries still held prejudice against foreign financial institutions, believing that the banking system left over from the colonial period could not serve their own economic development. Other countries that implement the socialist system firmly believe that the role of market mechanism is extremely limited and it is impossible to allocate the required funds for national key construction projects. Only by relying on the role of the government can limited funds be effectively allocated. Therefore, the original financial system of each country is a government-led financial system based on backward productive forces, and state-owned financial institutions are absolutely dominant. Although the specific situation varies from country to country, in general, it has the following characteristics:
1. The financial sector plays an insignificant role in the national economy, which is manifested in two aspects: First, the degree of economic monetization is low. The so-called economic monetization refers to the proportion of total monetary transactions in the gross national product in a certain period, which represents the developed degree of a country's monetary system and the development level of commodity economy. For a long time, the degree of monetization in most Asian developing countries has been at a low level. For example, 1970, the proportion of M z (ten currencies in cash and ten currencies in demand deposits) in GNP is 33% in Malaysia, 2 1.2% in the Philippines, 30.6% in Thailand and 9.9% in Indonesia. Second, the proportion of financial assets to GDP is not high. In the early 1980s, the ratio of financial institution assets (excluding central bank assets) to GDP was 0.3% in Indonesia (1982), 0.48% in Thailand (1980) and 0.39% in India (1981). This ratio is much lower than that of developed countries.
2. The types of financial instruments are monotonous and lack of competition mechanism. In many developing countries in Asia, central banks and commercial banks are in an absolute dominant position, non-bank financial institutions are in a subordinate position, and various securities markets are in a primary or underdeveloped stage, making it difficult for foreign financial institutions to enter their own markets. For example, 1977, among several ASEAN countries, the four largest commercial banks account for 73% of all domestic savings. 1%, Malaysia 50.3%, Philippines 39.8%, Thailand 64.6%, Singapore 20.6%. In this case, financial institutions can not play the role of mobilizing domestic savings funds for economic development in a fair competitive economic environment.
3. In the operation of the financial system, the state intervenes too much, which is manifested in the following aspects: First, the state directly controls the ownership of a large number of banks and other financial institutions. In the early 1970s, some or all of the financial assets of Bangladesh, India, Indonesia, Pakistan and Sri Lanka were state-owned. Second, the interest rate exchange rate is strictly controlled. The highest deposit and loan interest rate is set by the financial authorities of various countries, which makes the interest rate not truly reflect the relationship between supply and demand of funds, and the real interest rate (that is, the nominal interest rate MINUS the inflation rate) is often negative. The fixed exchange rate system pegged to the world's major currencies is a monetary policy adopted by many countries, and its exchange rate fluctuation range is limited to a very small range. Third, the direction of bank loans is constrained, and banks must invest a certain proportion of loans in departments designated by the state. In India, the loan projects stipulated by the government usually account for more than 50% of the total loan.
It should be noted that this government-led financial system in Asian developing countries played a positive role in expanding domestic capital accumulation and raising limited funds to invest in national key industries in the initial stage of national economy in the 1950s and 1960s. However, with the continuous development of economy, the negative effects of this financial system in which state financial institutions occupy a monopoly position are becoming more and more obvious. It lacks competition and efficiency, so that the bank's lending behavior is influenced and dominated by national policies and administrative orders, which can not effectively reflect the relationship between market supply and demand, resulting in price distortion, unreasonable resource allocation, financial market suppression and other problems.
Second, the impact of financial repression on macroeconomic development.
The imperfection of the market mechanism and the excessive intervention of the state in the financial system have led to the development of China in Asia.