ABSTRACT
The Asian financial crisis illustrates the absence of unified theory among social scientists. In reality, there are three complementary streams of causality rising from political science, economics, and investment banking. This chapter examines some countries became victims while others remained relatively healthy requires analyzing the political, economic, and financial aspects of each case. Thailand, Indonesia, and Korea fall victim to the Asian financial crisis, but China and India have not fallen. The constellation of vested interests in these countries precluded bold policy responses which might have mitigated the sharp decline in domestic and international confidence. Thailand and Indonesia both suffer from a legacy of political clientelism. In Thailand, Indonesia, and Korea, the size of the hole in the financial system created by domestic and foreign debt remains enormous. Non-performing loans in Thailand equal approximately one-quarter of the GDP. One solution is nationalization of the banking systems. This is being done partially in Korea and Thailand.
