Prior to the crisis, most of the countries in the region restricted the entry of foreign-owned banks. That has begun to change. South Korea is now actively promoting small and medium-sized businesses. At the same time it is investing more in education. And Thailand has been lowering barriers to foreign investment in retail and consumer finance.
Structural reforms are painful.
They involve loss to people who have benefited under the prior system, especially the politically well-connected. On the other end of the economic scale, they often translate into unemployment and social pain that may cause social upheaval and rioting. Yet, unless progress is made on structural reforms, foreign capital will not flow into the region. It will require political resources and courage to stick with these reforms. One of the real problems of a quick partial recovery is that the impetus for structural reform could be sidetracked.