03 July 2017
This week marks the 20th anniversary of the Asian financial crisis (AFC). The turmoil began in Thailand on 2 July 1997 and quickly spread to Malaysia, the Philippines, South Korea and Indonesia. The contagion effects of the crisis reverberated around the world. Financial markets collapsed and economic growth rates dipped sharply especially in the five crisis-affected countries.
The social costs of the crisis were also high as poverty levels swelled. Post-crisis recovery turned out to be V-shaped reflecting a sharp fall and a quick rebound and therefore the resilience of the East Asian countries. The AFC highlighted the weaknesses of an international monetary system where the International Monetary Fund (IMF) was the sole crisis-fighter. In East Asia, the IMF had also misdiagnosed the crisis and prescribed wrong policies that deepened the crisis.
… Pradumna B. Rana is Associate Professor and Coordinator of the International Political Economy Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.
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Last updated on 05/07/2017