The Asian financial crisis was a financial crisis that started in July 1997 in Thailand and affected currencies, stock markets, and other asset prices in several Asian countries, many considered East Asian Tigers. It is also commonly referred to as the Asian currency crisis or locally as the IMF crisis although the latter is somewhat controversial. A currency crisis (also known as a financial crisis) occurs when the value of a currency changes quickly, undermining its ability to serve as a medium for exchange or a store of value. ... The New York Stock Exchange A stock market is a market for the trading of company stock, and derivatives of same; both those securities listed on a stock exchange as well as those only traded privately. ... The East Asian Tigers, also known as Asias Four Little Dragons (Simplified Chinese: 亚洲四小龙, Traditional Chinese: 亞洲四小龍; Pinyin: Yǎ Zhōu Sì Xiǎo Lóng) (dragon being a reference to China in Chinese culture), refers to the economies of Hong Kong, Taiwan, Singapore, and South Korea. ...

Indonesia, South Korea and Thailand were the countries most affected by the crisis. Hong Kong, Malaysia, Laos and the Philippines were also hit by the slump. Mainland China, India, Taiwan, and Singapore were relatively unaffected. Japan was not affected much by this crisis but was going through its own long-term economic difficulties. In this map of China, the light-coloured areas represent Mainland China, while yellow coloured area refers to Taiwan. ...

History and Causes

Until 1997, Asia attracted almost half of total capital inflow to developing countries. The economies of Southeast Asia in particular maintained high interest rates attractive to foreign investors looking for a high rate of return. As a result the region's economies received a large inflow of hot money and experienced a dramatic run-up in asset prices. At the same time, the regional economies of Thailand, Malaysia, Indonesia, the Philippines, Singapore, and South Korea experienced high, 8-12% GDP growth rates in the late 1980s and early 1990s. This achievement was broadly acclaimed by economic institutions including the IMF and World Bank, and was known as part of the Asian economic miracle. A developing country is a country with low average income compared to the world average. ... Location of Southeast Asia Southeast Asia is a subregion of Asia. ... An interest rate is the rental price of money. ... Hot money is used in economics to refer to funds which flow into a country to take advantage of a favourable interest rate, and therefore obtain higher returns. ... The 1980s decade refers to the years from 1980 to 1989, inclusive. ... The 1990s decade refers to the years from 1990 to 1999, inclusive. ... The flag of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring foreign exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ... Logo of the World Bank The International Bank for Reconstruction and Development (IBRD, in Romance languages: BIRD), better known as the World Bank, is an international organization whose original mission was to finance the reconstruction of nations devastated by WWII. Now, its mission has expanded to fight poverty by means...

Whatever the disputed causes, the Asian crisis started in mid-1997 and affected currencies, stock markets, and other asset prices of several Southeast Asian economies. Triggered by events in Latin America, particluarly after the Mexican peso crisis of 1994, Western investors lost confidence in securities in East Asia and began to pull money out, creating a snowball effect. The 1994 economic crisis in Mexico was an economic crisis that happened in December 1994 in Mexico. ...

In 1994, Princeton University (then MIT) economist Paul Krugman published an article attacking the idea of an Asian economic miracle. [1] He argued that East Asia's economic growth had historically been the result of capital investment, leading to growth in productivity. However, total factor productivity had increased only marginally or not at all. Krugman argued that only growth in total factor productivity, and not capital investment, could lead to long-term prosperity. Krugman would be seen by many as prescient after the financial crisis became full-blown, though he himself stated that he had not predicted the crisis or forseen its depth. Princeton University, incorporated as The Trustees of Princeton University, located in Princeton, New Jersey, is the fourth-oldest institution to conduct higher education in the United States. ... The Massachusetts Institute of Technology, or MIT, is a research and educational institution located in the city of Cambridge, Massachusetts, USA. MIT is a world leader in science and technology, as well as in many other fields, including management, economics, linguistics, political science, and philosophy. ... An economist is an individual who studies, develops, and applies theories and concepts from economics, and writes about economic policy. ... Paul Krugman Paul Robin Krugman (born February 28, 1953) is an economist who has written several books and since 2000 has written a twice-weekly op-ed column for The New York Times. ... Total-factor productivty (TFP) addresses any effects in total output not caused by inputs or productivity. ...

At the time Thailand, Indonesia and South Korea had large private current account deficits and the maintenance of pegged exchange rates encouraged external borrowing and led to excessive exposure to foreign exchange risk in both the financial and corporate sectors. In the mid-1990s, two factors began to change their economic environment. As the U.S. economy recovered from a recession in the early 1990s, the U.S. Federal Reserve Bank under Alan Greenspan began to raise U.S. interest rates to head off inflation. This made the U.S. a more attractive investment destination relative to Southeast Asia, which had attracted hot money flows through high short-term interest rates, and raised the value of the U.S. dollar, to which many Southeast Asian nations' currencies were pegged, thus making their exports less competitive. At the same time, Southeast Asia's export growth slowed dramatically in the spring of 1996, deteriorating their current account position. The term current account usually refers to the current account of the balance of payments (BOP) and contains the import and export items of goods and services as well as transfer payments including net investment income. ... A fixed exchange rate, sometimes (less commonly) called a pegged exchange rate, is a type of exchange rate regime wherein a currencys value is matched to the value of another single currency (most often the US Dollar), to a basket of other currencies, or to another measure of value... For other uses, see United States (disambiguation) and US (disambiguation). ... The Federal Reserve System is headquartered in the Eccles Building on Constitution Avenue in Washington, DC. The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central bank of the United States. ...

Some economists have advanced the impact of Mainland China on the real economy as a contributing factor to their ASEAN nations' export growth slowdown, though these economists maintain the main cause of the crises was excessive real estate speculation. China had begun to compete effectively with other Asian exporters particularly in the 1990s after the implementation of a number of export-oriented reforms. Most importantly, the Thai and Indonesian currencies were closely tied to the dollar, which was appreciating in the 1990s. Western importers sought cheaper manufacturers and found them, indeed, in China whose currency was depreciated relative to the dollar. Other economists dispute this claim noting that both ASEAN and China experienced simultaneous rapid export growth in the early 1990s. We dont have an article called Real economy Start this article Search for Real economy in. ... A fixed exchange rate, sometimes (less commonly) called a pegged exchange rate, is a type of exchange rate regime wherein a currencys value is matched to the value of another single currency (most often the US dollar), to a basket of other currencies, or to another measure of value...

Many economists, like those within the Cato Institute, believed that the Asian crisis was created not by market psychology or technology (which actually represents a more efficient form of capitalism through the ability to acquire information cheaply and more quickly) but by macroeconomic policies that distorted information which in turn created the volatility that attracted speculators. What some have called "herd mentality" was merely the result of speculators behaving rationally, noting the fraudulent currency policies (Fixed exchange rates attempting to be defended by their government) which speculators assumed could not be sustained. Such economists believe that this crisis was the result of unsustainable macroeconomic/protectionist policies which create the very "market" imperfections they were originally designed to correct. The Cato Institute is an influential libertarian non-profit public policy research foundation (think tank) headquartered in Washington, D.C. The Institutes stated mission is to broaden the parameters of public policy debate to allow consideration of the traditional American principles of limited government, individual liberty, free markets, and... Herd behaviour is the term used to describe situations in which the individuals of any particular group react coherently. ...

Other economists, including Joseph Stiglitz and Jeffrey Sachs, have downplayed the role of the real economy in the crisis compared to the financial markets due to the speed of the crisis. The rapidity with which the crisis happened has prompted Sachs and others to compare it to a classic bank run prompted by a sudden risk shock. Sachs points to strict monetary and contractory fiscal policies implemented by the governments at the advice of the IMF in the wake of the crisis, while Frederic Mishkin points to the role of asymmetric information in the financial markets that led to a "herd mentality" among investors that magnified a relatively small risk in the real economy. The crisis has thus attracted interest from behavioral economists interested in market psychology. Joseph Stiglitz (born February 9, 1943) is an American economist, author and winner of Nobel Prize for economics ( 2001). ... Jeffrey Sachs Jeffrey David Sachs (born November 5, 1954 in Detroit, Michigan) is an American economist known for his work as an economic advisor to governments in Latin America, Eastern Europe, the former Soviet Union, Asia, and Africa. ... Theatrical promotional poster depicting a bank run A bank run is a type of financial crisis. ... Frederic S. Mishkin (January 11, 1951) is an economist and currently the Alfred Lerner Professor of Banking and Financial Institutions at the Graduate School of Business, Columbia University. ... In economics, information asymmetry occurs when one party to a transaction has more or better information than the other party. ... Nobel Prize in Economics winner Daniel Kahneman, was an important figure in the development of behavioral finance and economics and continues to write extensively in the field. ... Nobel Prize in Economics winner Daniel Kahneman, was an important figure in the development of behavioral finance and economics and continues to write extensively in the field. ...

The foreign ministers of the 10 ASEAN countries believed that the well co-ordinated manipulation of currencies was a deliberate attempt to destabilise the ASEAN economies. Malaysian Prime Minister Mahathir Mohamad accused currency speculator George Soros of ruining Malaysia's economy with massive currency speculation. At the 30th ASEAN Ministerial Meeting held in Subang Jaya, Malaysia they issued a joint declaration on 25 July 1997 expressing serious concern and called for further intensification of ASEAN's cooperation to safeguard and promote ASEAN's interest in this regard.[2] Coincidentally, on that same day, the Central Bankers of most of the affected countries were at the EMEAP (Executive Meeting of East Asia Pacific) meeting in Shanghai, and they failed to make the New Arrangement to Borrow operational. A year earlier, the finance ministers of these same countries had attended the 3rd APEC finance ministers meeting in Kyoto, Japan on 17 March 1996, and according to that joint declaration, they had been unable to double the amounts available under the General Agreement to Borrow and the Emergency Finance Mechanism. As such, the crisis could be seen as the failure to adequately build capacity in time, to prevent currency manipulation. Main languages See Languages of ASEAN Secretary General Ong Keng Yong of Singapore Area  - Total 4,480,000 km2 Population  - Total (2004)  - Density 550,000,000 122. ... Mahathir bin Mohamad (born December 20, 1925 in Alor Star, Kedah) was the Prime Minister of Malaysia from July 16, 1981 to 2003. ... George Soros George Soros (pronounced ) (born August 12, 1930 in Budapest, Hungary as Schwartz György) is a financial speculator, stock investor, philanthropist, liberal political activist and philosopher. ... Note: For the use of the term speculative in literature, see speculative fiction. ... Subang Jaya is a residential hub in the Klang Valley conurbation in Selangor, Malaysia. ... Shanghai (Chinese: 上海 pinyin: (help· info); Shanghainese: Zanhe ) , situated on the banks of the Yangtze River Delta, is Chinas largest city. ... APEC may refer to: Asia-Pacific Economic Cooperation Action Programme on the Elimination of Child Labour Advanced Placement European Civilization Atlantic Provinces Economic Council This article consisting of a 4-letter acronym or initialism is a disambiguation page — a list of pages that otherwise might share the same title. ... This page is about the city Kyoto. ...

IMF and Controversy

The role of the International Monetary Fund (IMF) was very controversial during the crisis, causing many locals to call the crisis the "IMF crisis." To begin with, many commentators in retrospect criticized the IMF for encouraging the developing economies of Asia down the path of "fast track capitalism", meaning liberalization of the financial sector (i.e. elimination of restrictions on capital flows); maintenance of high domestic interest rates in order to suck in portfolio investment and bank capital; and pegging of the national currency to the dollar to reassure foreign investors against currency risk. [3]. The logo of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ... Risk is the potential harm that may arise from some present process or from some future event. ...

However, the greatest criticism of the IMF's role in the crisis was targeted towards its response. As country after country fell into crisis, many local businesses and governments that had taken out loans in US dollars, which suddenly became much more expensive relative to the local currency which formed their earned income, found themselves unable to pay their creditors. The dynamics in this scenario were similiar to that of the Latin American debt crisis. The Latin American debt crisis refers to a period in the early 1980s (and for some countries starting in the 1970s) where countries in the region reached a point where their foreign debt exceeded their earning power and they were not able to repay it. ...

In response, the IMF offered to step in in the case of each nation and offer it a multi-billion dollar "rescue package" to enable these nations to avoid default. However, the IMF's support was conditional on a series of drastic economic reforms influenced by neoliberal economic principles called a structural adjustment package (SAP). The SAP's called on crisis nations to cut government spending to reduce deficits, allow insolvent banks and financial institutions to fail, and aggressively raise interest rates. The reasoning was that these steps would restore confidence in the nations' fiscal solvency, penalize insolvent companies, and protect currency values. However, the effects of the SAP's were mixed and their impact controversial. Critics, however, noted the contractionary nature of these policies, arguing that in a recession, the traditional response is to increase government spending, prop up major companies, and lower interest rates. The reasoning was that by stimulating the economy and staving off recession, governments could restore confidence while preventing economic pain. They pointed out that the U.S. government pursued these expansionary policies when the U.S. itself entered a recession in 2001. These criticisms were informed from a Keynesian viewpoint. The term neoliberalism is used to describe a political-economic philosophy that had major implications for government policies beginning in the 1970s – and increasingly prominent since 1980 – that de-emphasizes or rejects positive government intervention in the economy, focusing instead on achieving progress and even social justice by encouraging free... Structural adjustment is a term used by the International Monetary Fund (IMF) for the changes it recommends for developing countries. ... ... 2001: A Space Odyssey. ... Keynesian economics, or Keynesianism, is an economic theory based on the ideas of John Maynard Keynes, as put forward in his book The General Theory of Employment, Interest and Money, published in 1936 in response to the Great Depression of the 1930s. ...

Thailand

Exchange rate: Baht per U.S. Dollar

From 1985 to 1995, Thailand's economy grew at an average of 9%. On 14 May and 15 May 1997, the baht, the local currency, was hit by massive speculative attacks. On 30 June, Prime Minister Chavalit Yongchaiyudh said that he would not devaluate the baht, but Thailand's administration eventually floated the local currency, on 2 July. Exchange Rate US_Thailand This work is copyrighted. ... May 14 is the 134th day of the year in the Gregorian Calendar (135th in leap years). ... May 15 is the 135th day of the year in the Gregorian Calendar (136th in leap years). ... 1997 (MCMXCVII in Roman) is a common year starting on Wednesday of the Gregorian calendar. ... Thai banknotes and coins. ... June 30 is the 181st day of the year (182nd in leap years) in the Gregorian Calendar, with 184 days remaining. ... General Chavalit Yongchaiyudh (born May 15, 1932) was aThai politician, General, Defence Minister, Deputy Prime Minister and Thailands 22nd Prime Minister from (1996-1997). ... Devaluation is a reduction in the value of a currency. ... July 2 is the 183rd day of the year (184th in leap years) in the Gregorian Calendar, with 182 days remaining. ...

In 1996, an American hedge fund had already sold $400 million of the Thai currency. From 1985 until 2 July 1997, the baht was pegged at 25 to the dollar. The baht dropped very swiftly and lost half of its value. The baht reached its lowest point of 56 to the dollar in January 1998. The Thai stock market dropped 75% in 1997. Finance One, the largest Thai finance company collapsed. On 11 August, the IMF unveiled a rescue package for Thailand with more than 16 billion dollars. The IMF approved on 20 August, another bailout package of 3.9 billion dollars. The term hedge fund dates back to the first such fund founded by Alfred Winslow Jones in 1949. ... July 2 is the 183rd day of the year (184th in leap years) in the Gregorian Calendar, with 182 days remaining. ... 1997 (MCMXCVII in Roman) is a common year starting on Wednesday of the Gregorian calendar. ... August 11 is the 223rd day of the year (224th in leap years) in the Gregorian Calendar. ... The flag of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring foreign exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ... August 20 is the 232nd day of the year (233rd in leap years) in the Gregorian Calendar. ...

Philippines

The Philippines central bank raised interest rates by 1.75 percentage points in May 1997 and again by 2 points on 19 June. Thailand triggered the crisis on 2 July. On 3 July, the Philippines central bank was forced to intervene heavily to defend the peso, raising the overnight rate from 15 %to 24 % The peso fell significantly, from 26 pesos per dollar at the start of the crisis, to 38 pesos in 2000, to 40 pesos by the end of the crisis. June 19 is the 170th day of the year (171st in leap years) in the Gregorian Calendar, with 195 days remaining. ... July 2 is the 183rd day of the year (184th in leap years) in the Gregorian Calendar, with 182 days remaining. ... July 3 is the 184th day of the year (185th in leap years) in the Gregorian calendar, with 181 days remaining. ... The Philippine peso (Filipino: piso) is the official currency of the Philippines. ...

During the tenure of former President Joseph Estrada, the Philippine economy recovered from a contraction of .6 %in GDP during the worst part of the crisis to GDP growth of some 3 %by 2001. Unfortunately, scandals rocked his administration in 2001, most notably the "jueteng" scandal, which caused significant falls in the share prices of companies listed on the Philippine Stock Exchange. The PSE Composite Index, the main index of the PSE, fell to some 1000 points from a high of some 3000 points in 1997. The peso fell even further, trading from levels of about 35 pesos to 50 pesos. Later that year, he was impeached but was not voted out of office. Massive protests caused EDSA II, which led to his resignation and lifted Gloria Macapagal-Arroyo to the Philippine presidency. Arroyo did manage to end the crisis in the Philippines, which led to the recovery of the Philippine peso to about 45 pesos by the time Arroyo became president. José Marcelo Ejército a. ... The PSE Tektite buildings in Ortigas Center, Pasig City. ... The PSE Composite Index, commonly known as the PHISIX, is the main stock market index of the Philippine Stock Exchange. ... 1997 (MCMXCVII in Roman) is a common year starting on Wednesday of the Gregorian calendar. ... The EDSA II revolution is depicted on the 200-peso bill. ... Gloria Macaraeg Macapagal-Arroyo (born April 5, 1947) is the 14th and current president of the Philippines. ...

Hong Kong

The collapse of the Thai baht on July 2, 1997, came 24 hours after the United Kingdom handed over soveriegnty over Hong Kong to the People's Republic of China. In October 1997, the Hong Kong dollar, which was pegged at 7.8 to the US dollar, came under speculative pressure since Hong Kong's inflation rate was significantly higher than that of the US for years. Monetary authorities spent more than US$1 billion to defend the local currency. Since Hong Kong has more than US$80 billion of foreign reserves, which is equivalent to 700% of M1 money supply and 45% of M3 money supply of Hong Kong, Hong Kong managed to keep the currency pegged to the US dollar despite the speculative attacks. Stock markets become more and more volatile; between 20 October and 23 October the Hang Seng Index dipped by 23%. Hong Kong Monetary Authority promised to protect the currency. On 15 August 1998, Hong Kong raised rates overnight from 8 %to 23 % and at one point, to 500%. While the Monetary Authority recognized that the speculative forces were taking advantage of the unique currency board system, in which the overnight rates would automatically increase proportionally when the currency is sold in the market heavily, which would in turn increase the downward pressure of the stock market and thus allowing the speculators to earn a large profit by short selling shares, the Monetary Authority started buying component shares of the Heng Seng Index in mid-August. The Monetary Authority and Donald Tsang, then Financial Secretary, declared war with speculators openly. The Government ended up buying approximately HK$120 billion (about US$15 billion) of shares of various companies, and becoming the largest shareholder of some of the companies (e.g. the government owned 10% of HSBC) at the end of August when hostilities ended with the closing of the August contract of Heng Seng Index Futures. The Government started to divest itself from the position in 2001 and made a profit of about HK$30 billion (about US$4 billion) in the process. The Hong Kong dollar (currency code HKD) is the currency of the Hong Kong Special Administrative Region of the Peoples Republic of China, and has been the currency of Hong Kong since 1937. ... To meet Wikipedias quality standards and appeal to a wider international audience, this article may require cleanup. ... To meet Wikipedias quality standards and appeal to a wider international audience, this article may require cleanup. ... October 20 is the 293rd day of the year (294th in leap years) in the Gregorian Calendar, with 72 days remaining. ... October 23 is the 296th day of the year (297th in leap years) in the Gregorian Calendar, with 69 days remaining. ... Hang Seng Index (HSI, 恒生指數) is a capitalization-weighted stock market index in the Hong Kong Stock Exchange. ... The Hong Kong Monetary Authority (香港金融管理局) or HKMA (金管局) in short is a government authority founded on 1st April 1993 in Hong Kong from the consolidation of the Office of the Exchange Fund and the Office of the Commissioner of Banking. ... August 15 is the 227th day of the year in the Gregorian Calendar (228th in leap years), with 138 days remaining. ... 1998 (MCMXCVIII) was a common year starting on Thursday of the Gregorian calendar, and was designated the International Year of the Ocean. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... Sir Donald Tsang Yam Kuen GBM JP KBE (Chinese: 曾蔭權, Pinyin: Zēng Yīnquán, born October 7, 1944) has been the Chief Executive of Hong Kong since 2005. ... HSBC Holdings PLC (匯豐控股有限公司) (NYSE: HBC, LSE: HSBA, HKEx: 005, Euronext: HSBC) is one of the largest banking groups in the world. ...

Speculative actions against the Hong Kong Dollar and the stock market did not continue into September largely due to extraordinary reaction to speculators by the Malaysian authorities and the onset of the collapse of Russian bond and currency market, which caused massive loss to the speculators.

The currency peg between the Hong Kong Dollar and the US Dollar at 7.8:1 continued to exist undeterred.

South Korea

South Korea is the world's 11th largest economy. Macroeconomic fundamentals were good but the banking sector was burdened with non-performing loans. Excess debt would eventually lead to major failures and take-overs. For example, in July, South Korea's third largest car maker, Kia Motors asked for emergency loans. In the wake of the Asian market downturn, Moody's lowered the credit rating of South Korea from A1 to A3, on November 28, 1997, and downgraded again to Baa2 on December 11. That contributed to a further decline in Korean shares since stock markets were already bearish in November. The Seoul stock exchange fell by 4 %on 7 November 1997. On November 8, it plunged by 7 % the biggest one-day drop recorded there to date. And on November 24, stocks fell another 7.2 %on fears that the IMF would demand tough reforms. In 1998, Hyundai Motor took over Kia Motors. For the three-letter military term, please see KIA. Kia Motors Company KSE: 000270 is a South Korean automobile manufacturer. ... Moodys Corporation (NYSE: MCO) is the holding company for Moodys Investors Service which performs financial research and analysis on commercial and government entities. ... A credit rating agency is a company that rates the ability of a person or company to pay back a loan. ... November 28 is the 332nd day (333rd on leap years) of the year in the Gregorian Calendar. ... 1997 (MCMXCVII in Roman) is a common year starting on Wednesday of the Gregorian calendar. ... December 11 is the 345th day (346th in leap years) of the year in the Gregorian calendar. ... November 7 is the 311th day of the year (312th in leap years) in the Gregorian Calendar, with 54 days remaining. ... 1997 (MCMXCVII in Roman) is a common year starting on Wednesday of the Gregorian calendar. ... November 8 is the 312th day of the year (313th in leap years) in the Gregorian Calendar, with 53 days remaining. ... November 24 is the 328th day (329th on leap years) of the year in the Gregorian Calendar. ...

Malaysia

Pre crisis, Malaysia had a large current account deficit of 5 %of GDP. At the time, Malaysia was a top investment destination, and this was reflected in KLSE activity which was regularly the most active exchange in the world. (with turnover exceeding even markets with far higher capitalisation like the NYSE) . Expectations at the time were that the growth rate would continue, propelling Malaysia into developed status by 2020, a government policy articulated in Wawasan 2020. As at start of 1997, the KLSE Composite index was above 1,200, the ringgit was trading above 2.50 to the dollar, and the overnight rate was below 7%. The term current account usually refers to the current account of the balance of payments (BOP) and contains the import and export items of goods and services as well as transfer payments including net investment income. ... The Bursa Malaysia, previously known as Kuala Lumpur Stock Exchange (KLSE, Bursa Saham Kuala Lumpur in Malay) dates back to 1930 when the Singapore Stockbrokers Association was set up as a formal organisation dealing in securities in Malaya. ... New York Stock Exchange (June 2003) The New York Stock Exchange (NYSE) is one of the largest stock exchanges in the world. ... Wawasan 2020 is a slogan in Malaysia that stands for a vision of a more developed future Malaysia: a self-sufficient industrial develeped nation, complete with an economy that will be eightfold stronger by the year 2020 (as Greider describes it). ... The term composite can refer to several different things: A composite number is an integer greater than one that is not a prime number. ... Look up Index in Wiktionary, the free dictionary Index can be defined as: an ordered list, plural indexes a number or variable, plural indices. ...

In July, within days of the Thai baht devaluation, the Malaysian ringgit was "attacked" by speculators. The overnight rate jumped from under 8% to over 40%. This led to rating downgrades and a general sell off on the stock and currency markets. By end 1997, ratings had fallen many notches from investment grade to junk, the KLSE had lost more than 50% from above 1,200 to under 600, and the ringgit had lost 50% of its value, falling from above 2.50 to under 3.80 to the dollar. Thai banknotes and coins. ... The ringgit (unofficially known as the Malaysian dollar), is the official monetary unit of Malaysia. ... Speculation involves the buying, holding, and selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives or any valuable thing to profit from fluctuations in its price as opposed to buying it for use or for income ( via dividends, interest etc). ... Junk may refer to more than one concept: junk, a sailing vessel of Chinese origin Junk, a fictional planet in the Transformers universe junk or worthless material, see waste junk, a slang term for hard drugs (q. ...

In 1998, the output of the real economy declined plunging the country into its first recession for many years. The construction sector contracted 23.5 % manufacturing shrunk 9 %and the agriculture sector 5.9 % Overall, the country's gross domestic product plunged 6.2 %in 1998. During the year, the ringgit plunged below 4.7 and the KLSE fell below 270. In September that year, various defensive measures were announced to overcome the crisis. A recession is usually defined in macroeconomics as a fall of a countrys real Gross Domestic Product in two or more successive quarters of a year. ...

The principal measure taken were to move the ringgit from a free float to a fixed exchange rate regime. Bank Negara fixed the ringgit at 3.8 to the dollar. Capital controls were imposed. Various agencies were formed. The CDRC ( Corporate Debt Restructuring Committee) dealt with corporate loans. Danaharta discounted and bought bad loans from banks to facilitate orderly asset realization. Danamodal recapitalised banks. Bank Negara Malaysia (BNM) is the Malaysian central bank. ...

Growth then settled at a slower but more sustainable pace. The massive current account deficit became a fairly substantial surplus. Banks were better capitalised and NPLs were realised in an orderly way. Small banks were bought out by strong ones. A large number of PLCs were unable to regularise their financial affairs and were de listed.

Asset values however, have not returned to their pre crisis highs.

In 2005 the last of the crisis measures was removed as the ringgit was taken off the fixed exchange system. But unlike, pre crisis days, it does not appear to be a free float, but a dirty managed float, like the Singapore dollar.

Indonesia

Further information: Reformation (Indonesia), and [[]], and [[]], and [[]], and [[]], and [[]], and [[]], and [[]], and [[]]

In June 1997, Indonesia seemed far from crisis. Unlike Thailand, Indonesia had low inflation, a trade surplus of more than 900 million dollars, huge foreign exchange reserves of more than 20 billion dollars, and a good banking sector. The Reformation (in bahasa Indonesia Reformasi) is the name commonly used for the present era in the history of Indonesia. ...

But a large number of Indonesian corporations had been borrowing in U.S. dollars. During preceding years, as the rupiah had strengthened respective to the dollar, this practice had worked well for those corporations -- their effective levels of debt and financing costs had decreased as the local currency's value rose. The 1998-2001 series of rupiah banknotes Rupiah (Rp) is the monetary unit of Indonesia (currency code IDR). ...

In July, when Thailand floated the baht, Indonesia's monetary authorities widened the rupiah trading band from 8 %to 12 % The rupiah came under severe attack in August. On 14 August 1997, the managed floating exchange regime was replaced by a free-floating exchange rate arrangement. The rupiah dropped further. The IMF came forward with a rescue package of 23 billion dollars, but the rupiah was sinking further amid fears over corporate debts, massive selling of rupiah, strong demand for dollars. The rupiah and Jakarta Stock Exchange touched a new historic low in September. Moody's eventually downgraded Indonesia's long-term debt to junk bond. August 14 is the 226th day of the year in the Gregorian Calendar (227th in leap years), with 139 days remaining. ... 1997 (MCMXCVII in Roman) is a common year starting on Wednesday of the Gregorian calendar. ...

Although the rupiah crisis began in July and August, it intensified in November when the effects of that summer devaluation showed up on corporate balance sheets. Companies that had borrowed in dollars had to face the higher costs imposed upon them by the rupiah's decline, and many reacted by buying dollars, i.e. selling rupiah, undermining the value of the latter further.

The inflation of the rupiah and the resulting steep hikes in the prices of food staples led to riots throughout the country in which more than 500 people died alone in Jakarta. In February 1998, president Suharto sacked the governor of Bank Indonesia, but this proved insufficient. Suharto was forced to resign in mid-1998 and B. J. Habibie became president. Motto: Jaya Raya (Indonesian): Prosper and Great Founded 22 June 1527 Governor Sutiyoso Area 661. ... Suharto in official portrait. ... Bacharuddin Jusuf Habibie Bacharuddin Jusuf Habibie (born June 25, 1936), more commonly known simply as Rudy Habibie or B J Habibie, was the third President of Indonesia, holding office from 1998 to 1999. ...

Before the crisis, the exchange rate between the rupiah and the dollar was roughly 2000 rupiah to 1 USD. The rate had plunged to over 18000 rupiah to 1 USD at times during the crisis. The 1998-2001 series of rupiah banknotes Rupiah (Rp) is the monetary unit of Indonesia (currency code IDR). ...

Indonesia lost 13.5% of its GDP that year.

Singapore

The Singaporean economy dipped into a short recession almost purely as a result of contagion. The relatively short duration and milder effects can be credited to active management by the government. For example, the Monetary Authority of Singapore allowed for a gradual 20% depreciation of the Singapore dollar to cushion and guide the economy to a soft landing. The timing of government programmes such as the Interim Upgrading Program and other construction related projects were brought forward. Instead of allowing the labor markets to work, the National Wage Council pre-emptively agreed to CPF cuts to lower labor costs, with limited impact on disposable income and local demand. Unlike in Hong Kong, no attempt was made to directly intervene in the capital markets, and the Straits Times index was allowed to drop 60%. The Economy of Singapore is a highly developed and successful free market economy in which the state plays a major role. ... The Monetary Authority of Singapore is Singapores central bank. ... The Singapore dollar, divided into 100 cents, is the monetary unit of Singapore (currency code SGD). ... CPF may stand for: CandlePowerForums, a forum dedicated to flashlights and lighting technology. ...

In less than a year, the Singapore economy recovered, and continued on its growth trajectory.

Needless to say, the economic effects, although collectively much milder than in other economies, were, in absolute terms, still very devastating, to those badly affected.

People's Republic of China

The Chinese currency, renminbi (RMB), had been pegged to the US dollar at a ratio of 8.3 RMB to the dollar, in 1994. Throughout 1998 there was heavy speculation in the Western press that China would soon be forced to devalue its currency to protect the competitiveness of Chinese exports vis-a-vis those of ASEAN nations, whose exports became cheaper relative to China's. However, the RMB's non-convertibility protected its value from currency speculators, and the decision was made not to maintain the peg of the currency, improving the country's standing within Asia. The currency peg was partly scrapped in July 2005 rising (only) 2.3 % against the dollar, reflecting pressure from the United States. 100 Renminbi Yuan issued in 1999 The renminbi (Simplified Chinese: 人民币; Traditional Chinese: 人民幣; Hanyu Pinyin: ; literally peoples currency) is the official currency in the mainland of the Peoples Republic of China (PRC). ... The word western is an adjective used to refer to things that are in the West. ... Foo is new information or current events. ... Main languages See Languages of ASEAN Secretary General Ong Keng Yong of Singapore Area  - Total 4,480,000 km2 Population  - Total (2004)  - Density 550,000,000 122. ... Look up July in Wiktionary, the free dictionary July is the seventh month of the year in the Gregorian Calendar and one of seven Gregorian months with the length of 31 days. ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ...

Unlike investments of many of the Southeast Asian nations, almost all of its foreign investment took the form of factories on the ground rather than securities, which insulated the country from rapid capital flight. While the PRC was relatively unaffected by the crisis compared to Southeast Asia and Korea, GDP growth slowed sharply in 1998 and 1999, calling attention to structural problems with the PRC economy. In particular, the Asian financial crisis convinced the Chinese government of the need to resolve the issue of non-performing loans within the banking system. Seen in Asian markets in the 1990s capital flight is when assets and/or money rapidly flow out of a country. ...

Although most of the deposits in PRC banks are domestic and there was not a run on the banks, there was a fear within the Chinese government that weak banks would cause a future crisis lead to a scenario similar to the fall of Suharto in which the Communist Party of China would be overthrown. This led to measures to fix the banks and the industrial enterprises, which were largely complete by 2005. Suharto in official portrait. ... The Communist Party of China (CPC) (official name) or Chinese Communist Party (CCP) (Simplified Chinese: 中国共产党; Traditional Chinese: 中國共産黨; Pinyin: ) is the ruling political party of the Peoples Republic of China. ...

The United States and Japan

The "Asian flu" also put pressure on the United States and Japan. Their economies did not collapse, but they were severely hit.

On 27 October 1997, the Dow Jones industrial plunged 554-points, or 7.2 % amid ongoing worries about the Asian economies. New York Stock Exchange briefly suspended trading. The crisis led to a drop in consumer and spending confidence (see October 27, 1997 mini-crash). October 27 is the 300th day of the year (301st in leap years) in the Gregorian Calendar, with 65 days remaining. ... 1997 (MCMXCVII in Roman) is a common year starting on Wednesday of the Gregorian calendar. ... The Dow Jones Industrial Average (DJIA) is one of several stock market indices created by Wall Street Journal editor and Dow Jones & Company founder Charles Dow. ... New York Stock Exchange (June 2003) The New York Stock Exchange (NYSE), also nicknamed the Big Board, is the largest stock exchange in the world (by dollar volume) and second largest by number of listings. ... The Index of Consumer Confidence is issued periodically by The Conference Board, an independent economic research organization. ... Look up Confidence and confidence in Wiktionary, the free dictionary. ... The October 27, 1997 mini-crash is the name of a global stock market crash that was caused by an economic crisis scare in Asia. ...

Japan was affected because its economy is prominent in the region. Asian countries usually run a trade deficit with Japan because the latter's economy was more than twice the size of the rest of Asia together. About 40 %of Japan's exports go to Asia. GDP real growth rate slowed dramatically in 1997, from 5 % to 1.6 % and even sank into recession in 1998. The Asian financial crisis also led to more bankruptcies in Japan. Balance of trade figures are the sum of the money gained by a given economy by selling exports, minus the cost of buying imports. ... // Economic Profile Japans industrialized, free-market economy is the worlds third-largest by purchasing power parity (PPP) after the United States and China, and second-largest by market exchange rates. ...

Consequences in Asia

The crisis had significant macro-level effects, including sharp reductions in values of currencies, stock markets, and other asset prices of several Asian countries. Many businesses collapsed, and as a consequence, millions of people fell below the poverty line in 1997-1998. Indonesia, South Korea and Thailand were the countries most affected by the crisis.

The economic crisis also led to political upheaval, most notably culminating in the resignations of Suharto in Indonesia and Chavalit Yongchaiyudh in Thailand. There was a general rise in anti-Western sentiment, with George Soros and the International Monetary Fund in particular singled out as targets of criticisms. Suharto in official portrait. ... General Chavalit Yongchaiyudh (born May 15, 1932) was aThai politician, General, Defence Minister, Deputy Prime Minister and Thailands 22nd Prime Minister from (1996-1997). ... George Soros George Soros (pronounced ) (born August 12, 1930 in Budapest, Hungary as Schwartz György) is a financial speculator, stock investor, philanthropist, liberal political activist and philosopher. ... The logo of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ...

Culturally, the Asian financial crisis dealt a setback to the idea that there is a distinctive set of Asian values, i.e. that East Asia had found a political and economic structure that was superior to the West. Asian values was a concept that came into vogue in the 1990s, predicated on the belief in the existence in Asian countries of a unique set of institutions and political ideologies which reflected the regions culture and history. ...

More long-term consequences include reversal of the relative gains made in the boom years just preceding the crisis. For example, the CIA World Factbook reports that the per capita income (measured by purchasing power parity) in Thailand declined from $8,800 to $8,300 between 1997 and 2005; in Indonesia it declined from $4,600 to $3,700; in Malaysia it declined from $11,100 to $10,400. Over the same period, world per capita income rose from $6,500 to $9,300 [4],[5]. Indeed, the CIA's analysis suggests the economy of Indonesia was still smaller in 2005 than it had been in 1997 despite a population increase of 30 million, suggesting an impact on that country similiar to the Great Depression. World Factbook 2004 cover The World Factbook is an annual publication by the Central Intelligence Agency of the United States with basic almanac-style information about the various countries of the world. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... Indonesia has a market-based economy in which the government plays a significant role. ... Dorothea Langes Migrant Mother depicts destitute pea pickers in California, centering on Florence Owens Thompson, a mother of seven children, age twenty-nine, in Nipomo, California, March 1936. ...

Within East Asia, the bulk of investment and a significant amount of economic weight shifted from Japan and ASEAN to China. Main languages See Languages of ASEAN Secretary General Ong Keng Yong of Singapore Area  - Total 4,480,000 km2 Population  - Total (2004)  - Density 550,000,000 122. ...

The crisis has been intensively analyzed by economists for its breadth, speed, and dynamism; it affected dozens of countries, had a direct impact on the livelihood of millions, happened within the course of a mere few months, and at each stage of the crisis leading economists, in particular the international institutions, seemed a step behind. Perhaps more interesting to economists is the speed with which it ended, leaving most of the developed economies unharmed. These curiosities have prompted an explosion of literature about financial economics and a litany of explanations why the crisis occurred. A number of critiques have been leveled against the conduct of the International Monetary Fund in the crisis, including one by former World Bank economist Joseph Stiglitz. Financial economics is the branch of economics concerned with the workings of financial markets, such as the stock market, and the financing of companies. ... The logo of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ... Logo of the World Bank The International Bank for Reconstruction and Development (IBRD, in Romance languages: BIRD), better known as the World Bank, is an international organization whose original mission was to finance the reconstruction of nations devastated by WWII. Now, its mission has expanded to fight poverty by means... Joseph Stiglitz (born February 9, 1943) is an American economist, author and winner of Nobel Prize for economics ( 2001). ...

Consequences Elsewhere

After the Asian crisis, international investors were reluctant to lend to developing countries, leading to economic slowdowns in developing countries in many parts of the world. The powerful negative shock also sharply reduced the price of oil, which reached a low of $8/barrel towards the end of 1998, causing a financial pinch in OPEC nations and other oil exporters. Such sharply reduced oil revenue in turn contributed to the Russian ruble crisis in 1998. Major emerging economies Brazil and Argentina also fell into crisis in the late 1990s (see Argentine debt crisis). Logo The Organization of the Petroleum Exporting Countries (OPEC) is made up of Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela; since 1965, its international headquarters have been in Vienna, Austria. ... The Argentine economic crisis was part of the situation that affected Argentinas economy during the late 1990s and early 2000s. ...

The crisis in general was part of a global backlash against the Washington Consensus and institutions such as the IMF and World Bank, which simultaneously became unpopular in developed countries following the rise of the anti-globalization movement in 1999. Four major rounds of world trade talks since the crisis, in Seattle, Doha, Cancun, and Hong Kong, have failed to produce a significant agreement as developing countries have become more assertive, and nations are increasing turning toward regional or bilateral FTAs as an alternative to global institutions. The Washington Consensus is a set of policies promulgated by many neoliberal economists as a formula for promoting economic growth in many parts of Latin America by introducing various market-oriented economic reforms which are designed to make the target economy more like that of First World countries such as... The flag of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring foreign exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ... Logo of the World Bank The International Bank for Reconstruction and Development (IBRD, in Romance languages: BIRD), better known as the World Bank, is an international organization whose original mission was to finance the reconstruction of nations devastated by WWII. Now, its mission has expanded to fight poverty by means... Anti-WEF grafiti in Lausanne. ... 1999 (MCMXCIX) was a common year starting on Friday, and was designated the International Year of Older Persons by the United Nations. ... City nickname Emerald City City bird Great Blue Heron City flower Dahlia City mottos The City of Flowers The City of Goodwill City song Seattle, the Peerless City Mayor Greg Nickels County King County Area   - Total   - Land   - Water   - % water 369. ... Doha, Qatar Doha (Arabic: الدوحة;, Ad-Dawḥah or Ad-Dōḥah), population 400,051 (2005 census), is the capital of Qatar, and is at 25. ... Canc n is a coastal city in Quintana Roo, Mexicos easternmost state. ... FTA may stand for: FTA Free Trade Agreement, see free trade, or Trade bloc for a list of FTAs FTA Canada-U.S. Free Trade Agreement Free trade area FTAA Free Trade Area of the Americas Failure to appear, legal term Fundamental theorem of algebra, mathematical term Free-to-air...

See also

• Economy of Pakistan
• Economy of India
• Economics
• Economy of the People's Republic of China
• Economy of Hong Kong
• Economy of Indonesia
• Economy of Malaysia
• Economy of the Philippines
• Economy of South Korea
• Economy of Singapore
• Economy of Thailand
• Economy of the Republic of China (Taiwan)
• List of finance topics

Pakistan is a developing country with the worlds sixth-largest population, and an economic growth rate that has been consistently positive since a 1951 recession. ... The economy of India is the fourth-largest in the world as measured by purchasing power parity (PPP), with a GDP of US $3. ... Economics is a social science that studies the production, distribution, trade and consumption of goods and services. ... For the purpose of this article, the economies of the Special Administrative Regions of Hong Kong and Macau are considered separate from the rest of the Peoples Republic of China. ... The economy of Hong Kong has often been cited by people such as Milton Friedman and the Cato Institute as an example of the benefits of laissez-faire capitalism. ... Indonesia has a market-based economy in which the government plays a significant role. ... // Background The Malay Peninsula and indeed Southeast Asia has been a center for trade for centuries. ... The agricultural industry of the Philippines is one of the fastest growing economies in South East Asia. ... South Koreas economic growth over the past 35 years has been spectacular. ... The Economy of Singapore is a highly developed and successful free market economy in which the state plays a major role. ... The economy of Thailand is export-dependent, with exports accounting for 60% of GDP. Thailands recovery from the 1997-98 Asian financial crisis relied largely on external demand from the United States and other foreign markets. ... The Republic of China on Taiwan and other islands has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by the government. ... What follows is a list of over 250 Wikipedia articles on finance topics. ...

External Reference

• Michael Pettis, The Volatility Machine: Emerging Economies and the Threat of Financial Collapse Oxford University Press 2001 ISBN 0195143302
• Paul Blustein, The Chastening: Inside the Crisis that Rocked the Global Financial System and Humbled the IMF PublicAffairs 2001 ISBN 1891620819
• Frontline: The Crash, from the PBS series Frontline, unfortunately only the transcript is available and not the episode itself.
• WGBH's Commanding Heights, additional information in Episode 3 Chapters 11-14.
• Peter Gowan: The Globalization Gamble
• Ngian Kee Jin, Coping with the Asian Financial Crisis: The Singapore Experience. http://www.iseas.edu.sg/vr82000.pdf Extracted December 13, 2005.
• Tiwari, Rajnish (2003): Post-crisis Exchange Rate Regimes in Southeast Asia, Seminar Paper, University of Hamburg. (PDF)