AUTHOR(S) GUIDELINES
ONLINE SUBMISSIONS
STATISTICS
FOCUS AND SCOPE
ISSN
ARTICLE TEMPLATE
A Study on the Asian Financial Crisis of 1997: What Triggered the Crisis?
Abstract
ABSTRACT: Since the 1960s up to 1997, several East and Southeast Asian countries had experienced rapid economic growth. Despite the region’s economic miracle, it eventually faced the financial crisis at the beginning of 1997. Some observers had different opinions as to why the crisis occurred. This paper, using the qualitative approaches and theoretical review, attempts to explore the potential reasons that triggered the Asian financial crisis in 1997. The findings show that there are a number of explanations for the 1997 financial crisis, but none is adequate to completely understand it. According to some observers, the weaknesses of the financial sector are somewhat contributing to the severity of the financial crisis. This paper has also shown various factors in combination, there is no single explanation that is adequate for understanding the crisis. But, it can be argued that the potential triggers to the crisis were the weaknesses of some of the Asian financial sectors – lack of adequate systems of prudential regulation, poor banking supervision, excessive lending before 1997, the practice of crony capitalism (in the allocation of loans), and so forth. So, this paper intends to look at to what extent does the statement is reliable in explaining the occurrence of a crisis.
KEY WORD: Economic Growth; Asian Way; Financial Crisis; Mismanagement.
IKHTISAR: “Kajian mengenai Krisis Kewangan Asia 1997: Apa yang Mencetuskan Krisis?”. Sejak tahun 1960-an hingga 1997, beberapa negara Asia Timur dan Asia Tenggara telah mengalami pertumbuhan ekonomi yang pesat. Meskipun keajaiban ekonomi di rantau ini, ia akhirnya menghadapi krisis kewangan pada awal tahun 1997. Beberapa pemerhati mempunyai pendapat yang berbeza tentang mengapa krisis berlaku. Kertas kerja ini, menggunakan pendekatan kualitatif dan sorotan teori, cuba mencari kemungkinan sebab yang mencetuskan krisis kewangan Asia pada tahun 1997. Dapatan menunjukan bahawa terdapat beberapa penjelasan untuk krisis kewangan 1997, tetapi tidak ada yang cukup untuk memahami sepenuhnya. Menurut ramai pemerhati, kelemahan sektor kewangan agak menyumbang kepada keterukan krisis kewangan. Kertas ini juga telah menunjukan pelbagai faktor dalam gabungan, tidak ada penjelasan tunggal yang mencukupi untuk memahami krisis. Tetapi, boleh dikatakan bahawa potensi mencetuskan krisis adalah kelemahan beberapa sektor kewangan Asia – kekurangan sistem peraturan berhemat, pengawasan perbankan yang lemah, pinjaman berlebihan sebelum tahun 1997, amalan kapitalisme kroni (dalam peruntukan pinjaman), dan sebagainya. Oleh itu, kertas kerja ini bertujuan untuk melihat sejauh mana pernyataan itu dapat dipercayai dalam menjelaskan berlakunya krisis.
KATA KUNCI: Pertumbuhan Ekonomi; Cara Asia; Krisis Kewangan; Salah Urus.
About the Author: Nur Syazwani binti Haji Md Suif is a Ph.D. Candidate at the Department of History and International Studies, Faculty of Arts and Social Sciences UBD (University of Brunei Darussalam) in Bandar Seri Begawan, Negara Brunei Darussalam. For academic interests, the author is able to be contacted via e-mail at: nssuif@gmail.com
Suggested Citation: Suif, Nur Syazwani binti Haji Md. (2018). “A Study on the Asian Financial Crisis of 1997: What Triggered the Crisis?” in SUSURGALUR: Jurnal Kajian Sejarah & Pendidikan Sejarah, Volume 6(2), September, pp.109-116. Bandung, Indonesia: Minda Masagi Press and UBD Bandar Seri Begawan, Brunei Darussalam, ISSN 2302-5808.
Article Timeline: Accepted (July 3, 2018); Revised (August 31, 2018); and Published (September 30, 2018).
Keywords
Full Text:
PDFReferences
Acharya, V.V. & M.P. Richardson. (2009). “Causes of the Financial Crisis” in Critical Review: Journal of Politics and Society, Volume 21, pp.195-210.
Ahmad, D. (2003). “ASEAN+3: The Institutionalization of Asian Values”. Unpublished M.A. Thesis. Monterey, Canada: Naval Postgraduate School. Available online also at: https://pdfs.semanticscholar.org/5104/9cb19bc017b20c3b94a19834fb11f77a3554.pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: November 10, 2017].
Akyuz, Y. (2002). “Causes and Sources of the Asian Financial Crisis” in TWN Series on the Global Economy, published by TWN Third World Network.
Allen, F. & E. Carletti. (2010). “An Overview of the Crisis: Causes, Consequences, and Solutions” in International Review of Finance, Volume 10(1), pp.1-26.
Beeson, M. (2002). “Southeast Asia and the Politics of Vulnerability” in Third World Quarterly, Vol.23, No.3, pp.549-564.
Bell, D.A. (2006). Beyond Liberal Democracy: Political Thinking for an East Asian Context. USA [United States of America]: Princeton University Press. Available online also at: http://www3.nccu.edu.tw/~kangchan/readings/CPP/Bell_DA(2006book).pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: October 9, 2017].
Berben, R.P. et al. (2002). “Requirements for Successful Currency Regimes: The Dutch and Thai Experiences”. Available online at: https://www.mof.go.jp/english/international_policy/convention/asem/tyou048.pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: October 28, 2017].
Buruma, I. (1995). “The Singapore Way” in The New York Review, on October 19, pp.66-71.
Caprio, G., I. Atiyas & J.A. Hanson [eds]. (1994). Financial Reform: Theory and Experience. Cambridge: Cambridge University Press.
Claessens, S. & M.A. Kose. (2013). “Financial Crises: Explanations, Types, and Implications” in IMF Working Paper, WP/13/28, published by International Monetary Fund. Available online also at: https://www.imf.org/external/pubs/ft/wp/2013/wp1328.pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: October 28, 2017].
Corsetti, G.P. (1998). “Interpreting the Asian Financial Crisis: Open Issues in Theory and Policy” in Asian Development Review, Vol.16, No.2, pp.1-45, published by Asian Development Bank. Available online also at: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.201.7857&rep=rep1&type=pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: October 9, 2017].
Corsetti, G.P. & N. Roubini. (1998). “Paper Tigers: A Model of the Asian Crisis” in NBER Working Paper, No.6783.
Corsetti, G.P. & N. Roubini. (1999). “What Caused the Asian Currency and Financial Crisis?” in Japan and the World Economy, Volume 11, pp.305-373.
Dowling, J.M. & M.R. Valenzuela. (2010). Economic Development in Asia. Singapore: Cengage Learning, 2nd edition.
Fischer, S. (1998). “The IMF and Asian Crisis”. Available online at: https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp032098 [accessed in Bandar Seri Begawan, Brunei Darussalam: October 28, 2017].
Frankel, J.A. & A.K. Rose. (2010). “Exchange Rate Crises in Emerging Markets: An Empirical Treatment”. Available online at: https://sites.hks.harvard.edu/fs/jfrankel/CURRCRSH-WB1.PDF [accessed in Bandar Seri Begawan, Brunei Darussalam: October 28, 2017].
Gilbert, C. & D. Vines [eds]. (2003). The IMF and the International Financial Architecture. Cambridge: Cambridge University Press.
Head, J.W. (2010). “The Asian Financial Crisis in Retrospect: Observations on Legal and Institutional Lessons Learned After a Dozen Years” in East Asia Law Review, Volume 5. Available online also at: https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=1040&context=ealr [accessed in Bandar Seri Begawan, Brunei Darussalam: October 9, 2017].
Joosten, W. (2004). “The Asian Financial Crisis in Retrospect: What Happened? What Can We Conclude?” in CPB Memorandum: CPB Netherlands Bureau for Economic Policy Analysis, on March 23. Available online also at: https://www.cpb.nl/sites/default/files/publicaties/download/memo87.pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: October 9, 2017].
Julian, C.C. (2000). “The Impact of the Asian Economic Crisis in Thailand” in Managerial Finance, Vol.26, No.4, pp.39-48. Available online also at: http://dx.doi.org/10.1108/03074350010766611 [accessed in Bandar Seri Begawan, Brunei Darussalam: October 9, 2017].
Kawai, M. & M.B. Lamberte [eds]. (2010). Managing Capital Flows: The Search for a Framework. UK [United Kingdom] and USA [United States of America]: ADB [Asian Development Bank] Institute. Available online also at: https://www.adb.org/sites/default/files/publication/159341/adbi-managing-capital-flows.pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: October 28, 2017].
Lai, Q.B. (2008). “Currency Crisis in Thailand: The Leading Indicators” in The Park Place Economist, Volume VIII. Available online also at: https://www.iwu.edu/economics/PPE08/quan.pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: October 9, 2017].
Lee, C.H. (2000). “Financial Liberalization and the Economic Crisis in Asia”. Available online at: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.196.5730&rep=rep1&type=pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: October 28, 2017].
Li, L., M. Sy & A. McMurray. (2015). “Insights into the IMF Bailout Debate: A Review and Research Agenda” in Journal of Policy Modeling, Volume 37, Issue 6 [November-December], pp.891-914. Available online also at: https://www.sciencedirect.com/science/article/pii/S0161893815001003 [accessed in Bandar Seri Begawan, Brunei Darussalam: October 28, 2017].
MacIntyre, A. (1999). “Political Institutions and the Economic Crisis in Thailand and Indonesia” in Working Paper Series, Volume 99(8), April. Available online also at: http://www.agi.or.jp/workingpapers/WP1999-08.pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: October 28, 2017].
Milne, A. (2014). “The Control and Management of International Capital Flows: A Review of the Literature”. Available online at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/335058 [accessed in Bandar Seri Begawan, Brunei Darussalam: October 28, 2017].
Noble, G.W. & J. Ravenhill. (2000). “Cause and Consequences of the Asian Financial Crisis” in G.W. Noble & J. Ravenhill [eds]. The Asian Financial Crisis and the Architecture of Global Finance. UK [United Kingdom]: Cambridge.
Prakash, A. (2001). “The East Asian Crisis and the Globalization Discourse” in Review of International Political Economy, Volume 8(1), Spring, pp.119-146. Available online also at: http://faculty.washington.edu/aseem/east-asia.pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: October 28, 2017].
Ranta, P. (2017). “Malaysia’s and Indonesia’s Recovery from the Asian Financial Crisis: Comparison and Causes Behind the Recovery”. Unpublished Bachelor Thesis. Finland: Helsinki Metropolia University of Applied Sciences, Bachelor of Business, European Business Administration. Available online also at: https://www.theseus.fi/bitstream/handle/10024/130639/Ranta_Paula.pdf?sequence=1 [accessed in Bandar Seri Begawan, Brunei Darussalam: October 9, 2017].
Rigg, J. (2002). “Of Miracles and Crises: Re-Interpretations of Growth and Decline in East and Southeast Asia” in Asia Pacific Viewpoint, Vol.43, No.2, pp.137-156.
Stein, J.L. & G.C. Lim. (2004). “Asian Crises: Theory, Evidence, Warning-Signals” in Cesifo Working Paper, Category 6: Monetary Policy and International Finance, No.1159 [March]. Available online also at: https://www.cesifo-group.de/DocDL/cesifo1_wp1159.pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: October 9, 2017].
Stiglitz, J. (2006). Making Globalization Work. New York: W.W. Norton & Company.
Thompson, M.R. (1999). “Asian Values as Zivilisationskritik?”. Available online at: https://ecpr.eu/Filestore/PaperProposal/c9813a8c-52fc-45ff-bead-70f8d634d686.pdf [accessed in Bandar Seri Begawan, Brunei Darussalam: October 9, 2017].
Tremewan, C. (1994). The Political Economy od Social Control in Singapore. Basing-Stoke: St Martin’s Press.
Wade, R. & F. Veneroso. (1998). “The Asian Crisis: The High Debt Model Versus the Wall Street-Treasury-IMF Complex” in Newhett Review, No.228, pp.3-22.
Walters, N.B. (n.y.). “Falling from Grace: Why Did the Asian Financial Crisis Occur?” in Student Economic Review, published by Nigel Brook-Walters – Junior Sophister.
Winters, J.A. (2011). Oligarchy. New York: Cambridge University Press.
Woods, N. (2006). The Globalizers: The IMF, the World Bank, and Their Borrowers. Ithaca, New York: Cornell University Press.
DOI: https://doi.org/10.2121/susurgalur.v6i2.1091
DOI (PDF): https://doi.org/10.2121/susurgalur.v6i2.1091.g971
Refbacks
- There are currently no refbacks.
SUSURGALUR: Jurnal Kajian Sejarah & Pendidikan Sejarah. This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License