Asian crisis - context, factors, phases and exit

Résumé du document

After thirty years of sustained growth, the four "Dragons" (Hong Kong, Singapore, South Korea, and Taiwan) and the "Tigers" (Thailand, Malaysia, Indonesia and the Philippines) have almost reached the economic performances of Western countries. Based on high savings, high investment rates, abundant exports, these "newly industrialized economies" (NIEs) represented the effectiveness of "Asian values", an original alternative to Western occidental market. Since communist China entered capitalism and began recording growth rates equal to or greater than its neighbors, Asia was becoming a key player in the global economy. The Asian crash of July 2, 1997 in Bangkok undermines the Asian miracle. It threatens the global economy rapidly as a whole, through a domino game that nothing seems to stop. After Southeast Asia, Russia and Brazil, will China and Japan resist so long? Once again, when a crisis erupts, we are looking for those responsible. Are the Asians responsible for their own wounds or are they the innocent victims of international speculation? Is the international financial community responsible for it and should it reform its organization? The first problem to solve is that of the context and the causes of the crisis.

Extraits

[...] But the attacks continued and even the process of mutual assistance was not sufficient to contain the crisis. We then deal with the crisis of July what we shall see in more detail in the second part. II) The development of the crisis The Asian crisis is primarily a financial crisis. The main causes of the Asian crisis have been clearly identified in the first part. We will see in this part how it unfolds. Does the crisis affect all the countries in Asia? What was its trend from July 1997 to August 1998? [...]

[...] This Asian crisis therefore revealed the borders of the intervention of the IMF. Debates on the reform of worldwide financial architecture saw increasing proposals, without resulting at the moment in a tangible result. The leading powers of G7 decided on a series of measures intended to attenuate the destabilizing effects of flows of capital: on short term; an urgent mechanism was created allowing an increase of the capital of the IMF, on long term; it is a question of imposing rules of behaviour to all the financial actors. [...]

[...] It threatens the global economy rapidly as a whole, through a domino game that nothing seems to stop. After Southeast Asia, Russia and Brazil, will China and Japan resist so long? Once again, when a crisis erupts, we are looking for those responsible. Are the Asians responsible for their own wounds or are they the innocent victims of international speculation? Is the international financial community responsible for it and should it reform its organization? The first problem to solve is that of the context and the causes of the crisis. [...]

[...] Hence the abundance of more and more important capitals in the area. For instance, capitals of approximately 300 billion dollars in and the first semester of billions in 1995, and up to 500 billions in 1996 had been thus injected in Asian economies. Another characteristic of those economies was their high rate of savings, between and of the GNP at the beginning of the 90s, which constitutes an important source of funds for them. But behind this fine picture, the reality was a lot darker. [...]

[...] dollar, precipitating an economic and financial crisis whose long term effects is uncertain. The crisis began in Thailand on July Yet, the first wave of speculation against the Thai baht because of the high level of the current account deficit symptom led to the Mexican financial crisis of the winter 1994-1995) has already begun since the summer of 1996. This wave comes from the collapse of one of the first Thai finance companies. Following the fall of the Thai baht, all currencies like the Malaysian ringgit and the Indonesian rupiah fall. [...]