Development Research and Policy Analysis Division (DRPAD)

Poverty and Development Division
(PDD)

last updated : 14 September 2001

Development Papers, No. 20
"Asian economic crisis: causes, consequences and policy lessons"
(ST/ESCAP/1973)

Contents

Preface

I. AN OVERVIEW OF THE CRISIS IN EAST AND SOUTH-EAST ASIA AND SELECTED POLICY IMPLICATIONS

Azizul Islam

Introduction

A.The policy context and the evolution of the crisis

B. The underlying causes

C. Selected domestic policy issues

D. Some thoughts on international and regional cooperation

E. Concluding observations

Comment, Djisman S. Simanjuntak

II. THE EAST ASIAN CRISIS: MACROECONOMIC DEVELOPMENTS AND POLICY LESSONS

Kalpana Kochhar, Prakash Loungani and Mark R. Stone

Introduction and summary

A. Origins of the crisis

B. Onset and spread of the crisis

C. Policy responses

D. Lessons for crisis resolution

E. Lessons for avoiding crises

Comment, Kunio Saito

Comment, Ammar Siamwalla

III. PRIVATE CAPITAL FLOWS TO ASIAN DEVELOPING COUNTRIES: PAST TRENDS AND FUTURE PROSPECTS

Pradumna B. Rana

Introduction

A. Trends until 1996

B. Sharp reversal in 1997

C. Prospects for private capital flows to the Asian developing countries

D. Lessons for the non-affected countries

Comment, P.J. Nayak

IV. CORPORATE GOVERNANCE IN EAST ASIA: A FRAMEWORK FOR ANALYSIS

Stephen Prowse

Introduction

A. External finance and corporate governance

B. The situation in East and South-East Asia

C. Some suggestions for the future

Comment, Andrew Procter

V. SOUND PRACTICES TO FACILITATE DEVELOPMENT OF THE FINANCIAL SECTORS IN THE ASIAN DEVELOPING COUNTRIES

Paul Dickie

Introduction

Sound practices

BOX

II.1.

Asian crisis countries: summary of structural reforms

TABLES

I.1.	Exchange rates and stock market indices
I.2.	Changes in the dollar value of exports and current account balances
I.3.	Stock of debt to foreign private creditors, 1992-1997
I.4.	International reserves
II.1.	ASEAN-4 and the Republic of Korea: key economic indicators, 1990-1999
II.2.	Crisis countries: exchange rates and CPI inflation, June 1997 - April 1998
II.3.	Asian crisis countries: real effective exchange rates
II.4.	Asian crisis countries: growth of monetary aggregates, 1997-1998
III.1.	Changes in degree of global financial integration
III.2.	Net capital flows to the Asian developing countries
III.3.	Net private capital flows to the Asian developing countries, 1987-1996
III.4.	Five Asian economies: external financing
IV.1.	Stock market capitalization, 1985
IV.2.	Composition of companies' credit market debt, 1985
IV.3.	Summary statistics of ownership concentration for non-financial firms
IV.4.	Frequency of majority ownership and the identity of the majority shareholder
IV.5.	Legal and regulatory constraints on corporate control
IV.6.	Legal and regulatory constraints on the access of non-financial firms to non-bank finance
IV.7.	Number of firms complying fully, partially, or not at all with OECD guidelines on disclosure practices
IV.8.	Legal protection for external financiers of firms
IV.9.	Ownership of selected business groups in the Republic of Korea by insiders
IV.10.	Leverage ratios in selected Asian countries and Latin America in the 1990s
IV.11.	Major characteristics of company laws in selected emerging economies

FIGURES

I.1.	Selected South-East and East Asian countries, index of real effective exchange rates, 1991-1996
I.2.	The process leading to the crisis
II.1.	Asian crisis countries: private sector credit growth, 1991-1997
II.2.	Asian crisis countries: movements in the yen-dollar exchange rate and exports
II.3.	Asian crisis countries: trade competition
III.1.	Net capital flows to Asian developing countries
III.2.	Changing composition of net private capital flows to developing member countries of ADB, 1980-1982 and 1994-1996
III.3.	Net private capital flows, 1970-1996
III.4.	Concentration of private capital flows, 1990-1996
IV.1.	Ownership structures

ANNEXES

II.1.	Asian crisis countries: key features of the prudential and regulatory framework before the crisis
II.2.	Crisis countries: main elements of structural reforms
II.3.	Summary of economic adjustment programmes in crisis countries

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