East Asian Crisis In The Econo


A large economic downturn in East Asia threatens to end its nearly
30 year run of high growth rates. The crisis has caused Asian currencies to fall 50-60%, stock markets to decline 40%, banks to close, and property values to drop. The crisis was brought on by currency devaluations, bad banking practices, high foreign debt, loose government regulation, and corruption. Due to East Asia’s large
impact on the world economy, the panic in Thailand, Indonesia, Korea, and other Asian countries has prompted other countries to worry about the affect on their own economies and offer aid to the financially troubled nations (Sanger 1).
The East Asian crisis has affected almost all of the Asian ations, ...

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government. Thailand and Indonesia also suffer from being overbuilt during real estate booms that Reven2 were the result of huge influxes of cash by optimistic foreign investors. South Korea faltered under the weight of its huge foreign debt, decreasing exports, and weakening currency (Lochhead 4-5).
Other major countries touched by the crisis are Japan, China, Malaysia, and the Philippines. Japan’s economy is burdened by $300 billion in bad bank loans and a recession. Chinese banks may carry bad banks loans of up to $1 trillion. The banks lend 66% of China’s investment capital to state-run industries that only produce 12% of China’s industrial output (Manning 2). Malaysia and the Philippines
are both faced with devalued currencies and lowered stock markets
(Lochhead 5).
The implications of the Asian financial crisis are many. A declining Asian economy will reduce demand for U.S. and other countries’ exports. The devalued currencies of East Asia will make Asian imports seen ...

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PAPER DETAILS
Added: 11/4/2007 03:09:43 PM
Category: World History
Type: Premium Paper
Words: 684
Pages: 3

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