Documentos de Académico
Documentos de Profesional
Documentos de Cultura
by Hirofumi Ushikoshi
Economic Research Dept.
1. Introduction
Asia generally refers to the region bounded by Japan to the east, Siberia to the north, Indonesia
to the south, and Turkey and Saudi Arabia to the west, an area containing one-half of the
world's population. East Asia, as we use the term, includes China, NIEs1 (Korea, Taiwan,
Hong Kong, Singapore), and ASEAN 42 (Philippines, Thailand, Malaysia, and
Indonesia).3
East Asia has gained worldwide acclaim in recent years due to the region's sustained high economic
growth rate over the past several decades. This growth was led by NIEs in the 1960s, ASEAN in
the 1980s, and countries such as Vietnam in the 1990s. Interest in this success story culminated in
a World Bank report in 1993 entitled, "The East Asian Miracle."4
Nowadays, however, the World Bank is asking, "Is the East Asian 'Miracle' Over?" The
unexpected financial crisis has shaken confidence in some quarters regarding East Asia's ability to
maintain its high economic growth going forward.
Asia's currency crisis, which has rocked the world economy since July 1997, continues to fester
throughout the region, leaving the outlook for East Asian economies obscure. In this paper, we
look at the causes behind the recent currency problems and how the situation grew out of hand.
5. Prospects
Today, while weak currencies may help East Asia's trade competitiveness and exports, the
damaged domestic economies and implementation of IMF austerity programs point to an
inevitable slowdown in the region in the near term.
While similarities can be drawn between the austerity policies being implemented today and in
the 1930s in response to financial crises, there are major differences between the two cases.
First, since the IMF support is aimed at preventing a liquidity crisis, some of the economic
turmoil accompanying the currency and financial crises can be avoided. In this sense, the role
of the IMF in stabilizing the Asian currency crisis is an important one. Second, the austerity
measures imposed by the IMF are being combined with market opening measures,
deregulation, privatization, and other liberalization reforms. And third, countries are
shifting to floating rate systems at a relatively early stage.
Considering these differences, it is highly unlikely that global panic or protectionism will occur
in the near future. Looking further ahead, whether East Asia will resume its high rate of
sustainable growth will depend on each country's progress in implementing the necessary
structural reforms.