There are no ideologues in a financial crisis, former United States Federal Reserve chairman Ben Bernanke once said. Clearly the same does not hold true for political crises, as a comparison of Malaysia and South Korea very quickly reveals.
Tragedy has struck both nations in recent weeks, their travails played out in horrifying detail on the world’s television screens.
Fairly or unfairly, the hunt for a missing Malaysian airliner and the desperate attempt to rescue and now recover victims from the sunken Sewol ferry are being viewed as tests of the governments in Putrajaya and Seoul, if not of Malaysian and South Korean societies.
The grades so far? I would give South Korea an A-, Malaysia a D.
In the two weeks since the Sewol tipped over and sank — almost certainly killing 302 passengers, most of them high school students — South Korea has been gripped by a paroxysm of self-questioning, shame and official penitence.
President Park Geun-hye issued a dramatic and heartfelt apology. Her No 2, Prime Minister Chung Hong-won, resigned outright. Prosecutors hauled in the ship’s entire crew and raided the offices of its owners and shipping regulators. Citizens and the media are demanding speedy convictions and long-term reforms.
And Malaysia, almost two months after Malaysia Airlines Flight MH370 vanished? Nothing. No officials have quit. Prime Minister Najib Razak seems more defiant than contrite. The docile local news media has focused more on international criticism of Malaysia’s leaders rather than on any missteps by those leaders themselves.
Both countries are democracies — Malaysia’s even older than South Korea’s. The key difference, though, is the relative openness of their political systems. One party has dominated Malaysia since independence, while South Korea, for all its growing pains and occasional tumultuousness, has seen several peaceful transfers of power over the past quarter-century.
Unused to having to answer critics, Malaysia’s government has responded defensively. Korean officials, on the other hand, are reflecting, addressing the anger of citizens and delving into what went wrong with the shipping industry’s regulatory checks and balances.
That is why South Korea is likely to come out of this crisis stronger than ever, unlike Malaysia.
The two nations responded similarly after the 1997 Asian financial crisis, too. Malaysia’s then Prime Minister Mahathir Mohamad sought to prove Mr Bernanke’s axiom wrong, bizarrely blaming some shadowy Jewish cabal headed by Mr George Soros for the ringgit’s plunge.
Malaysia did not internalise what had gone wrong or look in the mirror. It did not admit it had been using capital inflows unproductively and that coddling state champions — including Malaysia Airlines — was killing competitiveness. Never did the ruling United Malays National Organisation consider it might be part of the problem.
Contrast that with South Korea’s response to 1997. The government forced weak companies and banks to fail, accepting tens of thousands of job losses. The authorities clamped down on reckless investing and lending and addressed moral hazard head-on. South Koreans felt such shame that millions lined up to donate gold, jewellery, art and other heirlooms to the national treasury.
South Korea’s response was not perfect. I worry, for example, that the family-run conglomerates, or chaebol, that helped precipitate the crisis are still too dominant a decade and a half later. But the country’s economic performance since then speaks for itself.
Now as then, South Korea’s open and accountable system is forcing its leaders to look beyond an immediate crisis. Ordinary Koreans are calling for a national catharsis that will reshape their society and its attitude towards safety. Ms Park’s government has no choice but to respond.
Malaysia’s government, on the other hand, appears to be lost in its own propaganda. To the outside world, Acting Transport Minister Hishammuddin Hussein performed dismally as a government spokesman: He was combative, defensive and so opaque that even China complained.
However, Mr Hishammuddin is now seen as Prime Minister material for standing up to pesky foreign journalists and their rude questions. The government seems intent on ensuring that nothing changes as a result of this tragedy. As hard as it seems now, South Korea will move past this tragedy, rejuvenated. Malaysia? I am not so sure. BLOOMBERG
ABOUT THE AUTHOR:
William Pesek is a Bloomberg View columnist based in Tokyo who writes on economics, markets and politics throughout the Asia-Pacific region.
*Paroxysm = refers to any sudden, violent outburst; a fit or violent action or emotion: paroxysms of rage