The Great Asian Meltdown

Paper Summary:

The paper posits that the British media suppressed reporting of the Asian Meltdown because of British leaders' involvement in the crisis. It reviews the crisis itself, when the Thai currency, the baht, failed, and a domino chain of other Southeast Asian currencies followed. The paper then examines the Asian Miracle of the 1980s, and shows that the seeds for the later failure were planted then. It shows how the IMF (International Monetary Fund) bailout of the banks exacerbated and prolonged the crisis. The writer contrasts the Asian and American economic models of investment, especially debt to equity ratios, and the intervention of speculators. In conclusion, the writer blames corruption and greed as the root causes of the crisis.
Sections:
Thesis Statement
The Admissions Statement of the BBC
The Origins of the Crisis
Other Factors to Consider in "From Miracle to Crisis"
What Defines the Asian Miracle
The US Observation of the Miracle
Debt and Corruption - The Handmaiden of Speculation
Reform and Conclusions

From the Paper:

"Among US observers, the "Asian Miracle," aroused both awe and fear, especially in the 1980s when Asian countries became formidable US competitors. Japan, which has now become the world's second most powerful economy after the US made sharp inroads into US domestic automobile and electronics' markets during the decade. Fierce competition with Japan and other Asian countries contributed to the yawning US trade deficits - when the value of US imports exceeds the value of its exports - and fueled a wave of protectionist sentiment in the US Congress.
"Moreover, this economic war between the US and Japan triggered and embolden the European Common Market by allowing it to form alliances on the mainland that became strong, strong competitive factors that were beginning to leave the British behind because of their reluctance to join the EU as a full partner. This, of course was over the currency issue raging between Conservative and Liberal parliaments and has yet to be settled.
"Southeast Asia's success seemed to vindicate certain economic policies that the US had largely shunned. Those policies gave Asian governments a large hand in shaping the marketplace. Asian bureaucrats took a leadership role in promoting certain industries and businesses and maturing them with tax credits or outright subsidies. Rather than allow the ravages of the free market to determine which businesses should succeed government leaders picked winners and ensured their prosperity."

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