Has the slow pace of financial sector reforms proved a blessing in disguise?
The idea that a lot of people have is that either you open the sector up or you don’t. If you choose to open, then you expose yourself to risk, and if you don’t, you avoid risk. This is an over-simplification and is usually perpetrated by interested parties. I believe that you have to look at the final analysis. Everybody knows that test cricket is more exciting than Ranji trophy. The question is, are you equipped to play test cricket? Similarly, the opening of the financial sector will help the economy; the more you open the more it benefits the economy. There should be some relationship between the development of the financial sector vis-å-vis other sectors. The economies that opened their financial sectors to a large extent have suffered the worst in this crisis. Also, closed economies like Burma or North Korea are not doing well. But there are a few countries that performed very well. Their growth was the best in the world, inflation was at its lowest and stability was high. Perhap
