Education About Asia: Online Archives

The “Asian Contagion”: A Reader’s Guide

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The multiple economic crises that have swept over a number of countries in Asia in the 1990s—the “Asian Contagion” in Karl Jackson’s apt phrase1—require all of us who teach in the area to do some serious rethinking. First to fall was the once mighty Japanese economy;
there the stock market kicked off the new decade by falling about 50 percent, following which real estate prices tumbled, and banks were saddled with bad loans. Despite repeated rescue and pump priming packages, annual GDP (gross domestic product) growth rates plummeted to 1 percent or less a year. Even bigger crises occurred in South Korea and Thailand in 1997 when the collapse of several business ventures led to major devaluation of the currencies and the fall of the governments i n both countries. In the coming months, complex, though clearly related, financial crises occurred in the once seemingly healthy economies of Indonesia, Korea and Malaysia. As neighboring nations were also affected to varying degrees, it became increasingly difficult to talk of the “Asian Economic Miracle” or the coming “Pacific Century.”