The Asian financial crisis of 1997-98 shook the foundations of the global economy and what began as a localised currency crisis soon engulfed the entire Asian region. This book explores what went wrong and how did the Asian economies long considered 'miracles' respond, among other things. The combined effects of growing unemployment, rising inflation, and the absence of a meaningful social safety-net system, pushed large numbers of displaced workers and their families into poverty. Resolving Thailand's notorious non-performing loans problem will depend on the fortunes of the country's real economy, and on the success of Thai Asset Management Corporation (TAMC). Under International Monetary Fund's (IMF) oversight, the Indonesian government has also taken steps to deal with the massive debt problem. After Indonesian Debt Restructuring Agency's (INDRA) failure, the Indonesian government passed the Company Bankruptcy and Debt Restructuring and/or Rehabilitation Act to facilitate reorganization of illiquid, but financially viable companies. Economic reforms in Korea were started by Kim Dae-Jung. the partial convertibility of the Renminbi (RMB), not being heavy burdened with short-term debt liabilities, and rapid foreign trade explains China's remarkable immunity to the "Asian flu". The proposed sovereign debt restructuring mechanism (SDRM) (modeled on corporate bankruptcy law) would allow countries to seek legal protection from creditors that stand in the way of restructuring, and in exchange debtors would have to negotiate with their creditors in good faith.
months of lengthy campaigning,
Ford would eventually lose the general election in November 1976. The year
1976–77 was, on all fronts, a difficult one for the Ford White House.5
US–UK relations were not to be an exception to this. Following a summer
of economic turmoil, which included speculative pressure on the UK
currency (sterling), and the refusal of international markets to lend further
credit to Britain to finance its spending, James Callaghan was forced to seek
a loan from the InternationalMonetaryFund (IMF). The IMF insisted that a
loan would only be provided
especially the powerful business interests of the oligarchs. The continuing
revenue shortfalls, the high debt-service burden and the international ﬂight
to quality ﬁnally pushed the authorities to appeal for foreign assistance.
Under pressure from the United States Treasury, the InternationalMonetaryFund on July 20, 1998 approved its portion (US$11.2 billion) of a
US$22.6 billion loan package to strengthen Russia’s economic program and
help stabilize the ruble.12 Although US$4.8 billion was spent almost immediately to defend the ruble, this failed to bolster conﬁdence in
Congress approved some $18 billion in much-needed new funding for the
IMF. Indeed, under the NAB, the 25 participating countries agreed to provide up to SDR 34 billion in supplementary resources to the IMF.14 The
Fund has also taken steps to increase its own resources. A 45 per cent quota
increase, raising the Fund’s total quotas to SDR 210 billion, took effect in
With this strong backing, the IMF has already begun to implement measures to “reform the way the InternationalMonetaryFund does business as
well as enhance its capacity to
greatest source of vulnerability, indeed, the fundamental weakness lay in Indonesia’s over-guaranteed but under-capitalized and underregulated banking sector. The precipitating factors were the contagion, but
also, more importantly, poor macroeconomic management by the Suharto
regime; and to a lesser extent the InternationalMonetaryFund exacerbated
The fact that nobody saw Indonesia’s impending collapse is hardly surprising. Hal Hill (1999, 8) notes that before the crisis “almost every technical
economic indicator looked safe.” Likewise
(about 80 per cent) towards the US
dollar.17 The Exchange Equalization Fund, chaired by the deputy governor
of the Bank of Thailand, determined the exchange value of the baht each
working day in accordance with ﬂuctuations of major currencies. With regard
to portfolio investment, in 1986 the authorities reduced tax impediments to
portfolio ﬂows, in particular, for purchasing Thai mutual funds.
The acceptance of Article 8 of the InternationalMonetaryFund (IMF)
Agreement by the Bank of Thailand on May 20, 1990 served as a catalyst to
further ﬁnancial liberalization
Post-crisis Asia – economic recovery, September 11, 2001 and the challenges ahead
Shalendra D. Sharma
In the aftermath of East Asia's spectacular economic collapse in mid-1997, even the most optimistic predictions gave at least a decade before Asia could fully recover. Although it was expected that the growing intra-Asian trade and demand from the European Union would help to fill the void, there was little doubt that Japan's recovery was crucial to the region's recovery. Most Asian countries experienced a sharp economic slowdown beginning in the last quarter of 2000. The problems of a deteriorating external environment due in large part to the downturn in the US economy were exacerbated by the September 11 terrorist attacks. The single greatest push for East Asian regionalism had been the Asian financial crisis. It was clear that the Asian governments agreed that they must reduce their dependence on the G-7 countries and multilateral financial institutions like the International Monetary Fund (IMF) and the World Bank.
in a country in which agriculture employs 70 per cent of
the population and accounts for two-thirds of export revenues; and rapid population growth. The legacy of the failed structural adjustment programmes of the
1980s imposed by the InternationalMonetaryFund and World Bank is evident
in contemporary Senegal’s high public debt and chronic economic problems,
particularly high unemployment. Despite all this, however, the country of Teranga
is a stable nation with a well-known tradition of commitment to both democracy
and human rights in Africa.
to rise again after 2000. By 2002 the deficit had
crossed the GSP threshold of 3 per cent of GDP and did so again in 2003.
In 2003 France received a mission from the InternationalMonetaryFund for an Article IV consultation (InternationalMonetaryFund 2003).
The IMF approved of the French government’s plans to cut the deficit in
the medium term. In response to the problem of population ageing and the
desirability of cutting taxes the IMF said that that the government should
aim for a small structural surplus ‘within the next five years’ and cut the
size of the
’ (Maddison 2001: 125).
The boom ended abruptly in 1974 (see Tables 1.1–1.3).2 The
InternationalMonetaryFund’s (IMF) managing director told his annual
conference in 1975 that the ‘declines in output that have occurred in the
industrial countries during 1974 and 1975 . . . are unprecedented in the
post-war period as to both magnitude and duration’ (cited in Hayden 1977:
7). From 1974 onwards, ‘output, productivity, and export growth all fell
sharply, instability in export volumes and GDP increased, and unemployment and inflation both rose’ (Glyn et al. 1990: 45). Economic