What I remember of Roberto M. Unger in law school was his prediction that corporations will one day rule. Jurisprudential hog-wash?

Last week, de facto law minister Dr Rais Yatim and Federation of Public Listed Companies president Megat Najmuddin Khas suggested that we are losing investors over the unresolved independence of the judiciary issue. This argument appears more cogent to the state and the corporate sector than arguments of constitutionalism, the balance of power and freedom of speech. This may serve as a warning signal of the future of our democracy.

Asia, lately through the economic crisis, has seen what countries in Latin America have long experienced with the IMF's structural adjustment programmes (SAPs) in the 1980s.

The Third World debt crisis in early 1980s was due to a worldwide collapse in the prices of commodities that developing countries exported and to rising oil prices and interest rates. Countries which borrowed heavily could not pay up. SAPs are devised to ensure that borrowing countries will continue to pay the interest on debts, but the principal continues to rise. In 1992 Mexico had a debt of US$82 billion; by 1994, the debt rose to US$140 billion.

With IMF loans, are cuts in spending on health and education, currency devaluation, rising interest rates, opening up to foreign ownership of domestic business and poverty. Economic gurus and human rights activists view the current bailouts in Asia would run a similar course to the SAPs.

In Asia, the world's largest banks and financial institutions contribute to the destabilising of national currencies through speculation thereby boosting the volume of dollar denominated debts. The same institutions then appear as creditors to collect the debts.

They then appear as policy-advisers or consultants to the IMF-World Bank sponsored rescue plan. As Michel Chossudovsky, the author of "The Globalisation of Povery, Impacts of IMF and World Bank Reforms", has put it, the world's largest money managers set countries on fire and are then called in as firemen to put out the blaze.

Lessons from Latin America also show that government or political elite support repression and the suspension of civil rights. As poverty and inequality continue to rise, the legitimacy of the regime is questioned. In Mexico in the late 1980s, systematic human rights violations are directed against independent trade unions, popular sectors opposed to neoliberal economic policies and opposition politicians.

While it has been argued that IMF-World Bank reforms do not directly lead to government repression of rights, these economic transformations can directly lead to violations when governments respond with repression to the opposition of poverty and inequality.

Bailouts are often accompanied by social and economic restructuring. This includes political and legal policies as well.

When Japan was forced to immediately dispose of its bad bank loans in 1998 to investors at depressed prices (less than 10 percent of their face value), it was also pressured by investors via high level US government officials, to rewrite its Constitution, restructure its political system and Cabinet and redesign its financial system.

In December, 1997, South Korea's Parliament had to pass legislation due to what is seen as "financial blackmail", that is, if legislation with IMF's deadlines are not met, the disbursements under the bailout will be suspended with the danger of renewed currency speculation.

The interest of multinationals in supporting the strengthening of institutional mechanisms and the rule of law should not be taken at face value. In Latin America, economic elite, foreign investors and international financial institutions demand for an enhanced rule of law is limited to the strengthening of the legal framework of private property.

The legal system is only improved in so far as it concerns the economic realm. It's a case of protecting investments. Most corporations and financial institutions are not concerned with the internal schemes of a state except that "stability" ensures investment into the country and capital flow out. Current bailout programmes are not about relieving the burden of the poor but rather to regain the confidence of foreign investors.

Arguably, crony-capitalism and kleptocracy of Asian nations worry corporations to the extent that they may destabilise the economy, but if it serves capital no corporation is losing sleep over it. The IMF during the Suharto regime was said to prop up the economy for foreign investment, oblivious to the clamour for democracy, until the people themselves triggered Suharto's downfall. IMF appeared unscathed as the rescuer of the economic crisis post the return of democracy.

Kanishka Jayasuria in an article entitled, "Corporatism and Judicial Independence", explores the situation where executive dominance has shaped judicial independence and autonomy. The judiciary functions as part of the executive to implement state policy and objectives. The judiciary becomes a division of power within the executive rather than as an aspect of the separation of powers.

This observation placed in the context of crony-capitalism and kleptocracy would add another dimension to our current concerns for judicial independence.

Human rights activists acknowledge that crony-capitalism is a problem in many Asian nations but argue it is not the main cause of the crisis. The causes of the crisis include the IMF capital accounts liberalisation policies and high interest rates, privatisation and trade liberalisation.

Should we allow capital to dictate to us the terms of our own governance? Many Asian governments have no choice but lose the nation's economic sovereignty in the bailouts. As we grapple with the power relationship between capital and the state, we have to remain vigilant of our political and economic elite's alliances with capital which may prove detrimental to our pursuit of the common good.

The problems are increasingly more complex for us to understand and respond to and answers may not be found within national boundaries. It becomes necessary for us to develop an integrated or multi-disciplinary approach in viewing our concerns.

In meeting this challenge, it is essential that we safeguard, protect and develop democratic processes and mechanisms as well as alternative models of development on the ground. But this may not be enough.