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Crisis, reform and recovery

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.

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Post-crisis Asia – economic recovery, September 11, 2001 and the challenges ahead

The Asian financial crisis 7 Conclusion: post-crisis Asia – economic recovery, September 11, 2001 and the challenges ahead To the extent that Asia is recovering, no one can claim the credit. The amazing thing to me – if you leave Indonesia out – is how similar the performances are, regardless of the policies. Korea took the IMF’s advice and it’s bouncing back. Thailand took the IMF’s advice and it’s starting to come back. Malaysia defied the IMF and did everything the IMF told it not to – it’s coming back fast. Everybody’s contemplating success for their

in The Asian financial crisis
Why China survived the financial crisis

The Asian financial crisis 5 The domino that did not fall: why China survived the financial crisis When the financial crisis unexpectedly hit the high-performing East and Southeast Asian economies in mid-1997, it was widely believed that the People’s Republic of China (PRC) would be the next domino to fall. China’s extensive intra-regional trade and investment linkages with the rest of Asia, and the fact that the Chinese economy suffers from many of the same debilitating structural problems that long plagued (and ultimately did incalculable damage) to the

in The Asian financial crisis
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The evolving international financial architecture

The Asian financial crisis 6 Beyond the Asian crisis: the evolving international financial architecture We face a world of crisis. If Hong Kong, with its sound fundamentals and prudent financial management, can be brought to the brink of systemic breakdown by aggressive cross-border speculation, then something must be wrong with the world financial order (Joseph Yam, chief executive of the Hong Kong Monetary Authority, January 5, 1999).1 Shortly after the Mexican peso crisis, the G-7 countries launched an effort to strengthen the international financial system

in The Asian financial crisis
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Issues, debates and an overview of the crisis

sudden collapse of the Mexican peso in December 1994, and more recently, the Asian financial crisis that was set off when the Bank of Thailand devalued the baht on July 2, 1997.1 The unexpected meltdown of the Thai economy and the contagion (the so-called Asian flu) spread with unprecedented ferocity, and, by the end of August 1997, the currencies of three of Thailand’s neighbors, Malaysia, Indonesia and the Philippines, had all been devalued substantially (see Table 1.1), despite vigorous efforts by these governments to stop their currencies from falling.2 During

in The Asian financial crisis
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Crisis, reform and recovery

The Asian financial crisis 4 Korea: crisis, reform and recovery We don’t know whether we would go bankrupt tomorrow or the day after tomorrow. I can’t sleep since I was briefed. I am totally flabbergasted . . . This is the bottom. It’s a matter of one month, no, even one day. I just can’t understand how the situation came to this (President-elect Kim Dae-Jung, December 23, 1997).1 In the 1950s, Korea was among the poorest countries in the world, with a per capita income of under US$100. In per capita terms, this placed the country below Haiti, Ethiopia, Peru

in The Asian financial crisis
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Crisis, reform and recovery

The Asian financial crisis 2 Thailand: crisis, reform and recovery During the period of economic growth, we were too complacent. In good times we forgot many important truths and neglected many important tasks; we opened up our economy, but our stated plans to pursue discipline were not followed up; we attracted massive flows of cheap foreign capital, which we did not always spend or invest with enough prudence . . . we did not examine the fundamentals of our politics and governance or tackle issues such as bureaucratic inefficiency, lack of transparency and lack

in The Asian financial crisis
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Crisis, reform and recovery

to be traded would be sufficient to ward off contagion. The Indonesian government, which received much praise for its swift and decisive response to the crisis, went to great lengths to assure jittery investors “that Indonesia was not Thailand.” Then the unthinkable happened. Indonesia suddenly succumbed to the contagion, and measured by the magnitude of currency depreciation and contraction of economic activity, it emerged as the most serious casualty of Asia’s financial crisis. In fact, with an economic contraction of 15 per cent in output in 1998, Indonesia

in The Asian financial crisis
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Governing Precarity through Adaptive Design

from the 2008 financial crisis, for example, has been the weakest and most prolonged on record ( Streeck, 2017 ). Reflecting the realities of the downturn, the new freedom to consume has, to a remarkable degree, been unequally distributed ( OECD, 2008 ; Oxfam, 2016 ). Precarity is a by-product of the long downturn. It emerges at that historic moment when the economy becomes a site of permanent emergency ( Streeck, 2011 ). A human surplus coexists with the ‘jobless’ growth resulting from the systemic urge to deepen automation at a time of

Journal of Humanitarian Affairs

liberal humanitarian institutions, which have depended on the financial and political capital of the US. Far from promoting a final and permanent peace, the new security strategy situates the US in an inter-state system in which war is possible at any time, in any location, with any rival, enemy or former ally. How might we explain this apparent shift in American strategy? A growing number of analysts, particularly North Americans, consider that we are seeing the end of the post-war liberal order. And they attribute liberal crisis to two fundamental factors

Journal of Humanitarian Affairs