What factors led to their downfall of their economies? Yes i have googled this and all the talk about Thailand (not) pegging its currency to the US dollar, frankly has my head spinning. This is why the last class i took on economics was mercifully in highschool. What fundamental factors led to their downfall ? Specifically, what roles did the IMF and WB play?
Putting this in the academic forum because it’s vaguely related to what i am sortof studying right now.
wrote a paper on the Asian Crisis in my 1st year M.B.A. International Business Environment class. Lemme see if I can dig it up - keep yer fingers crossed.
ooh 
hehe, no it’s okay Umar T 
i don’t want a whole paper 
i’ll have to keep you in mind for when i DO take an eco class though i just wanted sort of the down and dirty version of the factors that led to their economies’ downfall. You don’t have to waste your time posting up your entire paper. Thank you so much for the offer though.
let me help you sweetie.
First of all it is a misnomer that it was a bust. It was a crises..not a bust. it was a currency, balance of payments crises not a meltdown of the economy.
1) In 1997 as most Tiger currencies were pegged to the dollar, Thailand decided that it's reserves were strong enough to let the Baht float. What precipitated was a devaluation of the Thai currency and the inability fo the Tahi gov't due to the anemic reserves to stop the freefall.
Because it was originally pegged to the dollar, the approeciation of the dollar in the mid-90's, meant overvaluation of the Baht. Because of this overvaluation the exports of the thai gov't were going down hill, thus the reserves were anemic.
2) A lot of short term capital investment (ala china as we see today, where are those knuckleheads who cliam Great China blah, blha ,blah). Currency traders and Asian funds pumped up investment in real estate and early exit strategy investment vehicles. Creating an asset-bubble. As NPA's increased in the short amount of time, people pulled the money out. Capital FLIGHT!!!! (HELLLOOOOOOOO China)
3) I don;t rememeber but I also think there were some fiscal problems, rising labor costs due to capital dumping and competition from china etc..
4) No transparency in reporting. Unlike the stringent reporting standards in the US, Europe adn India (yes India), these chutiy*** had no controls palced on cap adequacy etc..
5) Speculation: Income george soros and merton scholes..wah ji wah...the currency traders shorted the currencies and the capital markets tooks a dive.
Spillover effect happened in almost all the asian countries, kindof like their bird flu.
IMF and WB(ADB) basically established longterm and short term bailout packages which provided for propping up the currencies over a period of time, ensuring better governance and financial oversight and giving guidance to the monetary authorities of the affected countries to ensure greater diligence and fisacl discpline in regulating.
Those were more details than i actually needed, but now i feel better equipped towards hopefully understanding the issue. Really appreciate your taking the time to type all that out. Thank you, Matsui.