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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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War, Debt, and Colonial Power

events leading up to the debt crisis of the 1980s in what today is referred to as the Global South. We conclude the chapter with a brief examination of the sovereign debt crisis in the so-called heartland of global capitalism. Imperial monetization, transformation, and resistance European colonial encounters during the so-called age of exploration revealed modes of life, cultural practices, and systems of meaning that were different from those experienced in Christian Europe. Outside Europe, different forms of money and exchange were observed, but in many instances

in Debt as Power
Open Access (free)
The Debt–Growth–Inequality Nexus

, and a US federal judge ruled in Singer’s favor, forcing Argentina to again default to avoid payment and throwing their economy into turmoil.13 Singer had pioneered these funds, when, in October 1995, Elliott Associates purchased some $28.7 million of Panamanian sovereign debt for $17.5 million from large banks such as Citi and Credit Suisse, which had given up on ever collecting. As was normal in situations where countries did not have enough to service their debt, the government of Panama asked bondholders to restructure the debt, by extending the time period or

in Debt as Power
Open Access (free)
Post-crisis Asia – economic recovery, September 11, 2001 and the challenges ahead

was earmarked for medium- and long-term reforms. By February 2000, US$21 billion had been committed, with US$13.5 billion for medium- and long-term reforms. Korea has been the largest recipient (US$8.4 billion), followed by Malaysia (US$4.4 billion), and Indonesia and Thailand with US$2.9 billion each, and the Philippines (US$2.5 billion). The initiative has supported economic adjustment, financial and corporate restructuring, social safety nets, infrastructure and export financing. In the second phase of the initiative, Japan has partially guaranteed sovereign debt

in The Asian financial crisis
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The evolving international financial architecture

. Of course, flexibility does not necessarily mean free floating. As Fischer (1999) notes, bands of fluctuation allow much flexibility if they are wide enough to ensure that the equilibrium exchange rate is included in the band. For countries that decided to retain a fixed exchange-rate system, they should, as a precondition, be requested to make the regime sustainable. 331 The Asian financial crisis A new approach to sovereign debt restructuring Recently Anne Krueger (2002), the new first deputy managing-director of the IMF, made a bold proposal: that under certain

in The Asian financial crisis
Open Access (free)
Crisis, reform and recovery

illiquidity rather than fundamental insolvency . . . what Korea needed was coordinated action by creditor banks to restructure its short-term debts, lengthening their maturity 225 The Asian financial crisis and providing additional temporary credits to help meet the interest obligations . . . Although many of the structural reforms that the IMF included in its early-December program for Korea would probably improve the long-term performance of the Korean economy, they are not needed for Korea to gain access to capital markets.” Rather, the IMF’s primary task should have

in The Asian financial crisis
Why China survived the financial crisis

debt-service ratio (i.e. debt service vs percentage of exports) at 8.5 per cent in 1998. As was noted earlier, the debt also has long maturity, with short-term debt making up only 19.7 per cent of total debt in 1996.17 Given this, it is not surprising that China is amongst a handful of developing economies with an investmentgrade rating on its sovereign external debt. Finally, the evidence is unequivocal: the fruits of post-reform economic development have trickled down to broad segments of the Chinese population. For example, per capita consumption has increased

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

channels – monsoonal effects, spillovers and pure contagion effects – the study by Goldfajn and Baig (1998) of financial market developments in Malaysia, Indonesia, the Philippines, Thailand and South Korea from July 1997 to May 1998 provides evidence of high correlations between sovereign spreads across the five countries. This indicates that markets felt that the probability of private debt default increased dramatically in these countries, and nervousness about one market was transmitted to other markets readily. As a consequence, global investors demanded higher risk

in The Asian financial crisis

to know what kind of vocabulary we should (and can) use to describe an event like ‘Kosovo’. It is of particular importance because our understanding of war has been central to the story of sovereign authority and modern statehood. The aim of this essay is therefore to map the alterations in the vocabularies used to describe ‘Kosovo’ by focusing on the productive aspects of war. I

in Mapping European security after Kosovo
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The international system and the Middle East

since the (formal) retreat of Western empires. As Sadeq al-Azm has noted, the Arabs and Muslims, viewing themselves as a historically great nation and bearers of God’s true religion, find it hard to accept their domination by the West ( Arab Studies Quarterly , 19:3, 1997, 124). As such, external intervention and its often damaging consequences has stimulated an on-going reaction manifested in nationalist and Islamic movements, in the rise of revisionist states, and in the attempts of regional states to assert autonomy and to restructure

in The international politics of the Middle East