Capital market development in Southeast Asia: From speculative crisis to spectacles of financialization

Abstract

The aftermath of the Asian financial crisis of 1997–98 witnessed a significant transformation of the financial systems of the Southeast Asia region. It saw the ascendance of capital markets in financial systems that had traditionally relied on bank loans and other sorts of so‐called relationship finance. This emergence of capital markets was by design rather than the spontaneous and natural result of their evolving market orders as policymakers shifted from planning for outcomes to planning for uncertainty. A financialized version of capital market development, conceptualized here as situated knowledge practice, has manifested itself in increasingly spectacular financial designs. The article explores two sites of the circulation of new financial knowledge: the dramatic performances of financial knowledge at (Islamic) capital market conferences and the new urban designs where financial knowledge is put to work. The analysis is informed by observations from Jakarta, Kuala Lumpur, and Singapore.

Finance beyond function: Three causal explanations for financialization

“…Unlike Graeber, however, most OPE scholars see financialization as a result of an additional layer of struggles-that is, as a weapon for political fights among dominant classes rather than only as a source of power utilized to control the 99%. Rethel (2010Rethel ( , 2018 and Rudnyckyj (2013) demonstrate how Malaysia's state-driven financialization was motivated by an attempt to gain international power and legitimacy and attract capital flows. Mattioli (2018) suggests that, in Macedonia, financialization is a constitutive part of an authoritarian statecraft project whereby new political elites are able to supplant older oligarchs by expanding credit relations and monopolizing the money supply.…”

“…She traces out, first, how gambling was morally problematized and, second, how finance was cleaved from gambling by valorizing financial work. Such valorization continues to this day, as explored by Rethel's (2018) analysis of state-orchestrated spectacles in Southeast Asia and in Polillo's (2018) examination of the discourse on financial market efficiency, what became a key foundation in the valorization of financial markets.…”

“…For example, in the 1980s, the distinction resurfaced by social movements addressing the unpayable debt accrued by the Global South (Bonizzi 2013). Dating from the same time period and extending to the present, these debates have become prolific in diverse Muslim-majority countries, particularly in the Islamic finance industry (Maurer 2005;Pitluck 2008Pitluck , 2013Rethel 2011;Rudnyckyj 2013) among pious Muslim entrepreneurs (Sloane-White 2017) and among Muslim consumers (Fischer 2011;Maurer 2006).…”

Gendered redistribution and family debt: The ambiguities of a cash transfer program in Brazil

“…Different forms of state-led financialization have been undertaken by national governments in Macedonia (Mattioli 2016(Mattioli , 2018, Greece (Kalaitzake 2017), the Netherlands (Fernandez and Wigger 2016), and Malaysia (Rethel 2018). Even at the core of supernational entities like the European Union, financialization seems to be interconnected with political struggles (Wigger 2012).…”

Corporate Islam, Global Capitalism and the Performance of Economic Moralities

“…4 The importance of conferences and similar events in 'shaping industries [and] creating professionals' has become a core concern of recent ethnographic work (Leivestad and Nyqvist 2017; see also Brown et al 2017;Sandler and Thedvall 2017). And indeed, they can be seen as orchestrated spectacles through which new market forms are both instantiated and legitimated (Rethel 2018a).…”