Essay east asian crisis - 1420 Words

East Asian financial crisis are an evidence of fact that economies are prone to fianacial pressures in spite of a stable sustainable growth rate. The East Asian economic crisis is the most important economic event in the region of the past few decades. That much is agreed. Beyond this, there is yet no unanimity about its root causes nor about the solutions. The differences of views are being debated in academic and policy circles and reflected in the media. One thing though is certain: the earlier optimistic expectation that it would last only some months has proved wrong. Instead the financial crisis has been transformed into a full-blown recession or depression. Moreover the threat of depreciation has spread from a few countries to†¦show more content†¦In an attempt to blame the crisis solely on the affected countries, intellectual quot;flip-flopsquot; were made. Features that had been toasted as strengths were overnight concerted into evils. For example, the countries had been praised (indeed, over-praised) for having strong linkages between the public and private sectors. Today, that is totally condemned as the fatal flaw of crony capitalism. As an alternative to mainly blaming the countries, there rapidly developed another view of how the crisis emerged and spread. This view put the blame on the developments of the global financial system, with the combination of the following features: †¢nbsp;nbsp;nbsp;nbsp;nbsp;Financial deregulation and liberalisation across the world (as the legal basis); †¢nbsp;nbsp;nbsp;nbsp;nbsp;The increasing interconnection of markets and speed of transactions through computer technology (as the technological basis); and †¢nbsp;nbsp;nbsp;nbsp;nbsp;The development of large institutional financial players (such as the speculative hedge funds, the investment banks, and the huge mutual and pension funds). This combination has led to the rapid shifting of large blocks of short-term capital flowing across borders in search of quick and high returns, to the tune of US$2 trillion a day. Only one to two percent is accounted for by foreign exchange transactions relating to trade and foreign direct investment. The remainder is for speculation or short-term investmentsShow MoreRelatedSouth East Asian Crisis2585 Words   |  11 PagesSeptember 10, 2011 September 10, 2011 Report Report South East Asian Crisis South East Asian Crisis INTRODUCTION The South East Asian financial crisis was a period of financial crisis that gripped much of Asia beginning in July 1997, and raised fears of a worldwide economic meltdown due to financial contagion. The crisis started in Thailand with the financial collapse of the Thai Baht caused by the decision of the Thai government to float the Baht, cutting its peg to the USD, afterRead MoreMalaysia During The East Asian Crisis1630 Words   |  7 Pagescapital controls. This will be demonstrated through the course of my essay by examining the case study Malaysia during the East Asian crisis in the late 1990s. The themes addressed in the case of Malayisa include the economic, political and monetary background of the country, followed by the policy tools of capital controls, its effectiveness and lessons. The East Asian Crisis started in 1997 due to a buildup of a large amounts of capital in the early 1990s inflows not due to foreign direct investmentsRead MoreFactors That Caused the 1997 East Asian Financial Crisis1604 Words   |  6 PagesFactors That Caused the 1997 East Asia Financial Crisis Discuss the principal factors responsible for the East Asian currency/financial crisis of 1997. In 1997, there occurred certain shifts in expectations from the market. The regional contagion and confidence led to the East Asian financial turmoil. In 1990s, it had been reported that the microeconomic and macroeconomic businesses were not performing as expected. The local and international investors had not held enough grips into the loomingRead MoreFinancial Crisis762 Words   |  4 PagesSyndicate group assignment What were the origins of the Asian currency crisis? The Asian currency crisis was a period of financial crisis started in Thailand in July 1997. Many Asian countries experienced a financial crisis are a large drop in the value of its currency and a large drop in its traded equity prices. Before the crisis happened, many Asian countries produced a dramatic reduction in poverty and rapid economic growth. Behind the boom, thereRead MoreImpact Of The Asian Financial Crisis Of 1997 On The Region s Development1704 Words   |  7 PagesExamine the impact of the Asian Financial Crisis of 1997 on the region’s development â€Å"Since World war II, development has been the most important term used to describe economic, social and political changes in what have come to be known as Third world countries† (Zhang, 2003). The Asian financial crisis of 1997 had a major impact on the regions development as it was the end of the East Asian economic miracle, a time that showed staggering economic growth throughout the Asia Pacific. HoweverRead MoreThe Crisis And The Prospects For Ifis811 Words   |  4 PagesKorea’s â€Å"IMF† Crisis and the Prospects for IFIs In 1997, the Thai baht came under speculative attack from international investors and the Thai government was eventually unable to support its currency peg. Due to the interconnected nature of the global economy, contagion occurred and the problems affecting Thailand spread to countries such as Malaysia, Indonesia, the Philippines, and South Korea. This event came to be known as the Asian Financial Crisis in the West. However, in South Korea it isRead MoreThe 2010s - A lost, instead of blossoming decade for China? Essay1061 Words   |  5 PagesThe financial crisis in 2008, having resulted from a tremendous bubble in the real estate market as well as highly leveraged banks and governments, has now become a debt crisis and is still an important in political discussions worldwide. Numerous employees have lost their jobs, many companies went bankrupt; nevertheless, there seemed to be one country that stroke off all difficulties and continued growing at an outstanding rate. In 2009 Chi na’s GDP grew by 9% (www.cia.gov), while all other economiesRead MoreThe Cause of the Asian Financial Crisis4396 Words   |  18 Pagesthat caused the Asian Financial Crisis in 1997. The review is made on 5 papers by 5 authors on the subject. Introduction The Asian Crisis of 1997 and 1998 affected many of the East Asian and South East Asian countries surprised many. This was due to the fact that in the early and mid-1990s these same countries were lauded as model economies with high Gross Domestic Product (GDP). Yet within a space of a few months in mid-1997, the currency crisis become a financial/economic crisis as many of theseRead MoreThe Republic Of South Korea1410 Words   |  6 PagesCharacteristics The republic of South Korea is located in East Asia, according to the World Bank it is a high-income developed country with a developed market, with a GDP of $1.449 trillion(US) and GDP per capita (ppp) of 25,977(US), averaging an annual growth rate of 2.9%. Over the past four decades the country has shown incredible growth and global integration to become a high-tech industrialized economy. South Korea is the world’s 4th largest car producers being home to Hyundai Motors, the largestRead MoreImf As An International Financial Institution Essay1130 Words   |  5 PagesThe 1997-1998 Indonesian Economic Crises. IMF Interventions - Lessons to learn. Introduction. 1997 to1998 saw the East Asian nations of Thailand, Indonesia and South Korea engulfed in an economic and financial crises that nearly collapsed their economies. The IMF was at the center stage to help during these crises. How IMF’s assistance further deepened Indonesia’s economic crises, received heavy criticism from Political, economic and social analyst against IMF s programs and Policies in Developing