Cengage Eco Dev Chapter 4 - Asian Crisis and Recent Developments
Cengage Eco Dev Chapter 4 - Asian Crisis and Recent Developments
Cengage Eco Dev Chapter 4 - Asian Crisis and Recent Developments
Chapter Objectives
1. Explain how the Asian Crisis evolved and what are the recent
developments in the region.
2. Understand the World Economy, Economic Growth, Economic
Recovery, and the emerging Development in Asia.
3. Explain the Social Impact of the Economic Crisis.
Post-Crisis
The Bubble
Economy
The World Economic
Economy Growth
External Contagion,
Sector Globalization Social
Difficulties Financial Impact of
Integration Economic
Crisis
Asian Crisis
Divide in Economic
Asia Recovery
Ineffective Non-performing
Sterilization of Loans
Capital Inflows
High Costs of
Balance Sheets
Financial Services
Rapid Growth in Current
Account-Deficits
External
Difficulties
Overvalued Collapse in
Exchange Rates Exports
Contagion Effect
Restructuring
Economic growth was not seen of the financial
system
until 5 years after the financial
crash. It was only then when the
Equity prices
world economy recovered, led increased
by India and China.
Exchange rates
Living standards rose and poverty
strengthened
fell. Increase in domestic demand
and foreign trade were significant
contributory factors in the
economic
uptrend in the Asian region.
Emerging Development Divide in Asia
Country GDP Annual Growth
2001 & 2007
ASEAN-5
Indonesia 5.1%
Malaysia 4.4
Philippines 4.4
Singapore 5.2
Thailand 5.0
Average for ASEAN-5 4.8
East Asia-4
China 10.2%
Hongkong 4.9
Korea 4.7
Source: Asian Development Bank, Taiwan 3.8
Asian Development Outlook,
various issues. Average for East Asia 4 5.9
Average without China 4.4
Social Impact of Economic Crisis
Source: Economic and Social Commission for Asia and the Pacific (ESCAP), Economic and
Social Survey of Asia and Pacific, Bangkok: United Nations (1999, p. 119)
Lessons and Prospects for the Future
Reform Agenda
Debt Restructuring
Global Surveillance
Greater Competition
Stock Markets