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Asian Financial Crisis

Essay by   •  December 22, 2010  •  2,016 Words (9 Pages)  •  1,563 Views

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Page 1 of 9


Abstract 2

Research Questions 2

Hypothesis 2

Literature Review 2-3

Timeline 3

Asian Financial Crisis

Ð'* Overview 4

Ð'* Singapore 4-6

Ð'* Malaysia 6-7

Conclusion 7

Bibliography 7


The research explains and compares how Singapore and Malaysia dealt with the Asian Financial Crisis. It shows how the government of both countries came up with strategies to overcome the crisis. It also shows a timeline of crises faced by Singapore, and how this has enabled our county to grow in times of adversity.

Research Questions:

My research questions were to compare how Singapore and Malaysia dealt with the Asian financial crisis, as well as proving that countries that dealt with crises effectively were able to develop socially and economically better and more efficient than its counterparts that struggle. I will also state a time line of Singapore's past crises.


My hypothesis was that the Singapore government is able to come up with quick solutions to halt the spread of crises in Singapore, and come up with much more viable solutions to not only solve the problem at hand, but also to ensure that such issues do not heavily affect us in the future. I also thought that Singapore's ability to deal with crises is the best within the South East region.

Literature Review:

In, the author states that the Ð''shortage of foreign exchange in Thailand, Indonesia, South Korea and other Asian countries that has caused the value of currencies and equities to fall dramatically', as well Ð''inadequately developed financial sectors and mechanisms for allocating capital in the troubled Asian economies' caused the financial crisis in South East Asia. It also shows how the IMF decided to deal with the crisis. The source is quite credible due to the fact that the author is a specialist in Industry and Trade Economics Division, and presented his findings to the US Congress in 1998. It is seen that he takes the stance from the American government point of view, as the crisis affected America as well. Hence, he focuses on how Asian markets failed, and what the IMF did to solve the problem. Other than that, his report was mainly based on America

As compared to, the author Ngian Kee Jin is a Singaporean and hence speaks about the crisis through Singaporean eyes. He is also considered reliable, considering he published a book on the crisis. Instead of looking at what other institutions did to help resolve the crisis, he focused on how Singapore itself dealt with the financial crisis. He spoke favourably of Singapore in dealing with the crisis, stating that Ð''the large and adverse economic shocks triggered by the Asian financial crisis could potentially have had a devastating effect on the Singapore economy. However, Singapore has withstood the financial storm lashing the region and even managed to maintain a relatively favourable economic performance.' Hence I feel more inclined to side the Singaporean who weathered the storm together with his country.

And in, Deirdre Griswo, a journalist for Worker's World newspaper, stated how the financial crisis came about, but this contradicts the 1st source. The author blames the imperialistic American and European economies for bringing about the crisis, stating that Ð''a huge runup in debt servicing has begun to seriously drain these countries' economies for the benefit of the big imperialist world banks. This and the weakening of global markets underlie the (financial) crisis.' He criticizes the western economies of exploiting and making use of their lesser developed counterparts, causing developing Southeast Asian countries to structure their economies around Western markets, and hence forming cheap labour industries. I am also inclined to believe this source as it is not written solely on the western markets' behalf, but also as it gives readers an insight on how the financial crisis started. The publishing company the writer works for does not represent any western corporation or industry, unlike the 1st source which was presented to the US Congress.

Timeline of Singapore's crises:

1950 - Maria Hertogh riots

1955 - Hock Lee Bus riots

1956 - Chinese Middle School Riots

1962-66 Konfrontasi

1963 - Operation Coldstore

1964 - Race riots

1965 - MacDonald House Bombing

1987 - Operation spectrum

1997 - Asian Financial Crisis

1997 - Southeast Asian haze

2001 - Embassy and MRT Bomb threat

2003 - SARS

2006 - Avian Flu

And in this essay, I will be focusing on an important crisis that happened in Singapore, the 1997 East Asian Financial Crisis.

Overview of The Financial Crisis

To give a brief overview on the Asian Financial Crisis, it occurred in mid-1997. Before the crisis, East Asian countries had been a prime location for investment, and foreign investments came pouring in. At that time, East Asian countries were developing and near-industrialised. Ð''The economies of Southeast Asia in particular maintained high interest rates attractive to foreign investors looking for a high rate of return. As a result the region's economies received a large inflow of hot money and experienced a dramatic run-up in asset prices'1 Hence, this was described as Ð''Asian Economic Miracle'. However, miracles rarely



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