1997 Asian financial crisis

The Asian financial crisis was a period of financial crisis. It gripped much of Asia beginning in July 1997.

Causes
Currency pegs and fixed exchange rates: Many Asian countries, including Thailand, South Korea, and Indonesia, had fixed exchange rate regimes or money pegs to the U.S. dollar. This made their currencies vulnerable to speculative attack.

 Rapid capital inflows and excessive borrowing: Asian economies experienced a surge in capital inflows and relied heavily on foreign borrowing, leading to over-investment and unsustainable levels of debt 

 Weak financial systems and corporate governance: short financial regulations, weak banking sectors, and poor corporate governance practices exacerbated the vulnerabilities in the affected economies 

Consequences
Money reduction: Many Asian currencies experienced significant devaluations, leading to a sharp decline in the value of assets and increased debt burdens for companies with foreign currency liabilities  

 Financial sector failures: Banks and financial institutions faced insolvency and encountered difficulties in meeting their duty, contributing to a severe banking crisis in the region 

 Economic contraction and social impact: The crisis resulted in severe economic contractions, rising unemployment, and social hardships, including increased poverty rates and social unrest in some countries 

IMF role
International Monetary Fund (IMF) assistance and conditionality: The IMF provided financial assistance to the affected countries, often in exchange for implementing structural reforms, fiscal austerity measures, and financial sector reforms.

Malaysia
Mahathir Mohamad was the Prime Minister of Malaysia during the 1997 Asian financial crisis. He took several steps to stabilize Malaysia's economy. This included implementing capital controls to prevent money from leaving the country too quickly, and also introducing stimulus packages to support businesses and the people. It helped Malaysia recover quickly from the crisis, faster than other affected countries.

 References 

Related pages
 1998 Russian financial crisis
Papers
 Ngian Kee Jin (March 2000). Coping with the Asian Financial Crisis: The Singapore Experience. Institute of Southeast Asian Studies. 
 Tiwari, Rajnish (2003). Post-crisis Exchange Rate Regimes in Southeast Asia, Seminar Paper, University of Hamburg.
 Kilgour, Andrea (1999). The changing economic situation in Vietnam: A product of the Asian crisis? 
 Stiglitz, Joseph (1996). Some Lessons From The East Asian Miracle. The World Bank Research Observer.
 Weisbrot, Mark (August 2007). Ten Years After: The Lasting Impact of the Asian Financial Crisis. Center for Economic and Policy Research.
 Tecson, Marcelo L. (2009), "IMF Must Renounce Its Weapon of Mass Destruction: High Interest Rates" (4-part paper on high-interest-rate fallacies and alternatives, emailed to IMF and others on 27 January 2009)

Other websites
 Women bear brunt of crisis, article by Australian photo-journalist John Le Fevre examining the effects of the Asian Economic Crisis on Asia's female workforce
 The Crash (transcript only), from the PBS series Frontline
 Impact on Indonesia from the Dean Peter Krogh Foreign Affairs Digital Archives
 Congressional Research Service report for US Congress
 Asia's Financial Sector: 12 Things to Know Asian Development Bank

Category:1997 in Asia
Category:Economy of Asia