Ailing South East Asia.(aftermath of the economic crisis in the region)(Brief Article)

Ailing South East Asia Peter Hartcher, "From Miracle to Malaise," in The National Interest (Spring 2001), 1112 Sixteenth Street N.W. #540, Washington, D.C. 20036.

The currency crisis that scarred the nations of Southeast Asia in 1997-98, warns Hartcher, Washington editor of the Australian Financial Review, have left these nations "enduringly impaired." "Much of Southeast Asia's prosperity," he warns, "was lost to the crisis and has not been regained."

Before the economic crisis, the nations of Southeast Asia had economies that were steadily growing by 6-10 percent a year. During the downturn, though, the Malaysian, Filipino, and South Korean economies all got smaller, and the Indonesian and Thai economies actually shrunk by a startling 10 percent. In all these countries, many banks, stuck with bad portfolios, collapsed and were nationalized. As a result, the Thai government now owns one-third of that country's banks, while Indonesia owns 78 percent of its national banks. The result: These nations are starved for capital and drowning in debt. Indonesia acquired so many bad banks that the central bank failed.

The currency crisis also left Southeast Asian nations with weak leaders ...