ABSTRACT
The year 1997 was a turning point in the development history of Pacifi c Asia. That summer saw the outbreak of the now well-known Asian fi nancial crisis, which brought to an end the ‘Asian Miracle’ that had dominated the international press and academic research for the previous two decades. What started out as a currency crisis in Thailand quickly turned into a fi nancial and economic crisis and spread to other economies like a ‘contagion’. Under sustained speculative attacks, all currencies in the region – except the New Taiwan dollar and the Singapore dollar – lost heavily against the US dollar, and as international capital sought to withdraw from these economies, the prices on their stock markets also plummeted. To avoid total fi nancial meltdown, the worst-hit countries, Thailand, Indonesia and South Korea, were all forced to borrow from the IMF and accept in return stringent conditionalities on the structural reform of their economies.
