Working Papers

The Asian Crisis

Publication Number: ECES WP 30-E&A

June, 1998

Author : Nadeem Ul Haque

Type : Working Papers

Over the last decade and a half, the East Asian economies have experienced rapid economic growth. Nevertheless, such rapid growth and boom conditions masked economic weaknesses that remained hidden so long as the boom continued. With the external environment becoming less favorable, the competitiveness of those economies started to erode resulting in the evolution of the economic crisis at the beginning of 1997. This crisis situation raised criticism of the ways in which the international financial institutions-including the International Monetary Fund (IMF)-do business, and thus calls for changing these ways emerged. This paper reviews the background to the crisis; the factors that may have contributed to it; and the economic policies implemented by the three main crisis countries - Korea, Thailand and Indonesia - in the context of IMF-supported economic programs. In addition, some tentative conjectures about the implications of the crisis and the role of the Fund are sketched along with some preliminary thoughts on the 'miracle. '