ABSTRACT
Has the Asian financial crisis (AFC) torpedoed the paradigm of economism? The AFC occurred at a historic time when stability and prosperity were needed and desired in virtually all economies in Asia. In the late 1980s and early 1990s, there was even talk about the “Pacific century,” suggesting that the development of Asian economies would become sustainable and dominate the world economy in the twenty-first century. Optimism remained high despite the structural difficulties that occurred in the Japanese economy in the early 1990s. The Asian economies were thought to be shielded from the economic and financial crisis in Latin America in the early 1990s. However, events in the second half of 1997, immediately after the reversion of sovereignty of Hong Kong, shattered all hopes of any favorable outcome as the growth and assets of number of Asian economies plummeted and their currencies depreciated. The East Asian “miracle” was over, leaving behind a number of “crisis-torn” economies with severe domestic structural problems.
