ABSTRACT
This chapter focuses on the causes, adjustment, prospects and lessons of the financial crisis in East Asia, especially, the five hardest-hit East Asian economies Indonesia, South Korea, Malaysia, the Philippines, and Thailand. It explores the nature and the causes of the East Asian financial crisis. When the crisis hit in mid-1997, the International Monetary Fund (IMF) assigned primary responsibility for the crisis to the shortcomings of East Asian relation-based (crony) capitalism, especially the fragility of East Asian financial markets. The East Asian financial crisis shows that even the supposedly most dynamic East Asian economies can come under serious attack once confidence in the currency is lost. The IMF has increased the amount of information disclosure since the Asian financial crisis prevailed. The greater transparency improvement also calls for the establishment of standards for macroeconomic data transparency. The chapter summarizes the economic prospects of the East Asian economies.
