Asian Financial Crisis

Vitoon Panyakul
A few years ago, if someone says the Thai economy would come to a brink of collapse soon, everyone would laugh. But now it is the reality, even though many people not yet awake from the shock and come to the term with it yet. Despite the government kept give assurance that the present crisis is still manageable and Thailand would soon return to the fast track of being the miracle tiger of Asia again, everyone else has already suffered from a series of serious economic recession and has no idea whether they can live through it. Read the rest of this entry »

Thomas Friedman (1997b) quotes Mr Teera Phutrakul, director of a Thai mutual fund, on the three stages of the financial crisis. “Stage one is denial. … We paid a heavy price for that stage, by trying to prop up our currency. Stage two is shoot the messenger. It’s all the fault of Moody’s rating agency for downgrading our credit. The third stage is admission and calling the IMF. Once you call the IMF, the party’s over.” Read the rest of this entry »

Good Growth Performance in the Recent Past. Thailand’s GDP grew at an average rate of 10 per cent per annum between 1987 and 1995 (Table 7) propelled by massive inflow of FDI from Japan, Hong Kong, Taiwan and Singapore. The peg of the Thai baht to a basket of currencies in which the US dollar dominated facilitated the inflow. The baht moved in tandem with the dollar during 1984-94 and depreciated by 57 per cent with respect to the yen and about 27 percent each against the Singapore dollar, the New Taiwan dollar and the SDR. These trends along with the rising labour costs in the major regional economies have helped Thailand as a destination for FDI. Read the rest of this entry »