Governed Interdependence, Communities of Practice and the Production of Capital Market Knowledge in Southeast Asia

This article revisits the notion of governed interdependence to examine the knowledge practices that have underpinned the expansion of debt capital markets in Southeast Asia, with a focus on Indonesia and Malaysia. It identifies two types of communities of practice – one of planners/policymakers, one of market practitioners – as central to the production of capital market knowledge and traces the emphasis placed on them by state actors through consecutive capital market development plans. The article then moves on to examining how both countries have sought to implement regimes for the training and licensing of capital market professionals in the wake of the financial crisis of the late 1990s. It argues that these knowledge practices bestow capital markets with legitimacy which makes the practices of investing in and borrowing from debt capital markets socially acceptable, if not even a key developmental objective. This is in the context of both the Asian crisis and more recent crises repeatedly showing the dangers of speculative portfolio investment as well as Islamic stipulations against speculative finance in these two Muslim-majority countries.