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The Asian Global Financial Crisis - Term Paper Example

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The paper focuses on the Global Financial Crisis of 2008 that caused panic in many countries. Although some critics have highlighted that the financial crisis was predictable and preventable, it shocked many economies. Many countries needed solutions in an effort to save the crumbling economies…
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The Asian Global Financial Crisis
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Download file to see previous pages Asian countries had faced a critical financial crisis in 1997, which was attributable to a high level of liquidity and volatility in foreign markets. The financial crisis brought down many economies such as Thailand, Korea, Japan, and Indonesia. More specifically, Thailand and Korea are two of the Asian countries affected by the 1997 financial crisis that managed to recover in a shorter time than expected. Therefore, when the global financial crisis of 2008 emerged, these countries had the opportunity to use the strategies developed in 1997 to recover easily from the crisis. This paper will seek to evaluate the responses of both Korea and Thailand during the global financial crisis and whether they reflect important lessons learned in 1997.
On July 1997, Asian countries woke up to the reality of a salient economic crisis that threatened many economies in the region. Although it was assumed to become a global financial crisis, in the end, it only remained a sectional financial crisis. Countries that were affected by the horrible crisis included, South Korea, Thailand, Malaysia, Indonesia, Singapore, and the Philippines (Tosompark 2014, p. 63). A close analysis of the history surrounding the Asian financial crisis reveals that it began in Thailand. This was after the Thailand currency, the Baht, registered a high level of devaluation. Initially, the Thailand government hoped that the Baht would recover its previous status without much intervention. Unfortunately, it only continued to register a declining value. The government was compelled to rely on the foreign currency market to fix the standing of the Baht. Notably, the loss of value by the Baht was accompanied by an immense foreign debt huge enough to declare the country bankrupt (Durham 2007, p. 58). Worth noting is the fact that the accumulated foreign debt happened before the collapsing of the Thai currency. These circumstances contributed to the emergence of a financial crisis. The crisis was not limited to Thailand as it slowly spread to other countries in East Asia. ...Download file to see next pagesRead More
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