The world's view of East Asian economies has drastically changed since the turmoil that swept the region in mid-1997.

Earlier in the 1990s, the region's rapid economic development was widely hailed as the "Asian miracle."

But the crisis exposed their excessive dependence on exports, vulnerability to currency fluctuation risks and other inherent weaknesses, as well as the deeply rooted problems of "crony capitalism."

The International Monetary Fund was mobilized as the lender of last resort, providing the countries with stand-by credit and calling on them to initiate bold structural reforms as a condition for aid.

Macroeconomic data show that South Korea as well as such ASEAN members as Thailand and Indonesia have steered their economies onto a recovery track. Their gross domestic products, which sharply plunged in 1998, had for the most part regained their precrisis levels by mid-1999. This is because currency depreciation has boosted the price competitiveness of their products and increased exports.

Recent figures also point to bright signs in some sectors of domestic demand, such as consumer spending. The IMF forecasts steady growth in these economies in 2000, with GDP reaching 4.5 percent in Thailand and 5.5 percent in South Korea.

How far then, have the Asian economies gone in terms of structural reform?

Experts point out that the Asian economic crisis was the result of a bad-loan quagmire created by private-sector banks, and that those economies need systematic reforms to beef up corporate governance, including improved bankruptcy laws, greater transparency in business transactions, and the elimination of dubious practices that thrive on collusion between public and private sectors.

Thailand, for example, has introduced a package of legislation that includes a new bankruptcy law aimed at facilitating the restructuring of corporate debt. Indonesia has enacted similar legislation together with a "Jakarta initiative" that promotes voluntary restructuring of private-sector debt.

However, there is room to doubt whether such legislation has really been effective in curing those woes.

In the first year after Indonesia's new bankruptcy law was put into effect, only a handful of corporate bankruptcies were declared. In most cases, applications filed for bankruptcy procedures at commercial courts have either been turned down or withdrawn. Although the new law is aimed at facilitating corporate liquidation, it lacks a clear provision for rehabilitation. It is questionable whether the IMF, in forcing the new system upon Indonesia, debated whether it could be smoothly implemented.

Normally, the business of a debtor will be liquidated if bankruptcy has been declared, causing unemployment and other elements of social unrest.

Last fall in Japan, the Diet enacted a new corporate rehabilitation law that paves the way for the so-called debtor-in-procession scheme of rehabilitation. It is the fruit of many years of discussions on ways for rebuilding small Japanese companies in a manner consistent with the nation's economic system. In order to help the Asian economies carry out structural reforms in an effective manner, Japan should provide technical assistance by sharing with them our experience in Asian-style systematic reforms.