HONG KONG: The worm has turned. The early repayment by Thailand last week of $12 billion borrowed from the International Monetary Fund at the time of the Asian crisis was not just a technical one made possible by its now buoyant external financial conditions. It was a conscious rejection of the neoliberal doctrines known as the Washington consensus, whose influence reached their high-water mark following the Asian financial crisis. Those doctrines are themselves now suspect at home as the U.S. economy shows many of the signs that characterized pre-crisis Asia.

At the very least the Thai move is an indication that the era of Washington-led globalization is over and that new forces are at work that may lead to new interpretations of globalization, or rejection of its themes of ever freer trade in goods and capital.

Thailand's decision was accompanied by a burst of nationalist sentiment from Prime Minister Thaksin Shinwatra. Standing in front of a giant national flag and using words more in keeping with the demeanor of his Malaysian neighbor, Mahathir bin Mohamad, than of most Thai ministers, the former businessman declared that Thailand would "never again fall prey" to the forces of foreign capital or need to resort to IMF help.

The rhetoric now seems likely to be followed by the reversal of some crisis era measures forced on Thailand by the IMF, which opened up many industries to foreign capital. Changes in bankruptcy and property laws enabled foreign companies to buy local ones crippled by the currency and debt crisis. There will not be a wholesale retreat from liberalization. Thailand is too pragmatic and competitive to cut off its own nose to spite foreigners. Some liberalizations are now enshrined in World Trade Organization commitments - and a Thai heads the WTO.

But there will be change in domestic laws affecting ownership and corporate activity, as a newly confident Thailand basks in its recovery, and as Thaksin accommodates the interests of local business. The government is also, in effect, taking revenge on foreign banks by allowing some big Thai businessmen extraordinary leeway to keep control of their companies without repaying their debts. The banks and their foreign media friends cry "shame" but many Thais see it as justice, albeit it rough.

The Washington consensus imposed itself on Asia because capital that had fled from Asia to the West had to be returned through the intermediation of the Bretton Woods institutions and friends in the U.S. Treasury. It was as much a bailout for the lenders as the borrowers. The Asian recovery from crisis needed the markets of the West, the United States in particular. Naturally, local market access conditions were attached so Asian countries had further reason to accept Washington's advice.

But now the situation is being reversed. The United States is ever more reliant on injections of capital from Asia - roughly $1 billion a day at present - and China is emerging as a more important source of future trade growth. The U.S. market is still by far the largest market for Asia, but the trend is clear. Given its own trade and payments position, the United States is not in much of a position to impose policies.

Given the international role of the dollar, the Asian crisis will not be replicated in the United States. But America's domestic debt and external imbalances are castrating U.S. economic influence and placing huge question marks over the sustainability of 20 years of U.S.-led liberalization. Now the United States has to plead for other countries to revalue to cope with the results of its own domestic excesses.

Asian gloating now will be no more helpful than was Western gloating over the Asian crisis. But it is as well to acknowledge the global significance of Thaksin's flag-waving. It marks the end of the Washington-consensus era. Will it also usher in a reaction in the United States itself against an era of liberalization which has brought prosperity but, according to its critics, at a very high price in foreign debt?