Case | HBS Case Collection | April 2002 (Revised April 2003)

Malaysia: Capital and Control

by Rawi E. Abdelal and Laura Alfaro


On September 1, 1998, the government of Malaysia imposed currency and capital controls in response to the financial crisis that had swept Asia. The controls sparked an enormous controversy in the world of international finance. Some celebrated the controls for insulating the Malaysian economy from the unstable international financial system. Others criticized the controls for trapping investors and allowing the government to protect the interests of "cronies." This debate also raised the central question about the future of the international financial architecture: What is the appropriate balance between financial market freedom and government discretion in the management of the global economy?

Keywords: Business and Government Relations; International Finance; Policy; Crisis Management; Balance and Stability; Globalized Economies and Regions; Malaysia;


Abdelal, Rawi E., and Laura Alfaro. "Malaysia: Capital and Control." Harvard Business School Case 702-040, April 2002. (Revised April 2003.)