Asian Crisis
There are many speculations about the causes of the Asian Crisis. From my
research I found out that there is quite a number of reasons for the Asian
currency crisis. There is a book called; The East Asian Miracle, which was
published by the World Bank. This book expressed the relationship between
government, the private sector, and the market. (See Hoover Digest 1998 No.3.

William McGurn. What went wrong?) The book talks about the economic bloom in

Southeast Asia. The East Asian countries borrowed a lot of money from the IMF
and World Bank and used it to create a better economy for themselves. I found
out that the following countries due to their reoccurrence during my research
experienced the bloom. The countries are as listed: South Korea, Indonesia, Hong

Kong, Thailand, Malaysia, The Philippines, Singapore and Taiwan. These countries
experienced a lot of growth, growth that even doubled the growth in the rest of

East Asia, and almost tripled the growth in Latin America. The economic miracle
started in South Korea, Hong Kong, Taiwan and Singapore then Malaysia, Thailand,

Indonesia and the Philippines. These countries achieved very remarkable rates of
growth and development. They built high quality manufacturing industries from
clothes to computers. (What went wrong? Hoover Digest 1998 No.3 William McGurn)

In the paper written by William McGurn "What went wrong?", he
explained that the people\'s minds in Asia only understood the word miracle and
the banks failed to recognize the risks and credits of the bloom. The banks also
failed to realize that they were only being used as policy arms by the
government. The only word that stuck in people\'s minds in Asia was the word
miracle. They therefor forgot the fundamentals, which could be easily
understood. William McGurn said that the countries that suffered the most in the

Asian economic crash were the countries that were heavily engaged in the state
planning. \'This in turn lead to all manners of extravagant claims about
"Asian Values" and the idea that western concepts such as competition
really didn\'t apply" (William McGurn. What went wrong?) On February 19,

1998 a group of Hoover fellows and invited experts assembled in the Hoover
institution to discuss the likely causes for the crisis. The discussion pulled a
very large crowd in to the Hoover Stauffer Auditorium to hear what the
well-recognized economists, political scientists and historians had to say. The
panel came to an agreement that the crisis that started in Asia was due to
excessive short-term borrowing, risky investments by banks and flawed government
policies that permitted such investments. (See Hoover Institution Newsletter

Spring 1998) From the article; "Why did it happen?", on this web site:, I found out that Asia had been
experiencing a miracle for the past 30 years, but they are now suffering a
crisis. These economies are now experiencing collapsing currencies and depleting
stock markets. The Asian countries at first borrowed a lot of money from the IMF
and the World Bank and used it to invest in certain unprofitable ordeals. "

The problem was bad in Thailand, where a succession of weak governments had
allowed money to flood into unwanted skyscrapers rather than investing in roads
and telecommunications, and education." (Directly from the article)
"The unwise spending was the worst in South Korea where the entire economic
system was based on governments encouraging banks to make cheap loans to big
conglomerates for continued expansion... regardless of world demand."
(Directly from article) They borrowed the money in US dollars thinking that they
would have no problems paying the debts off, because their currency\'s exchange
rates were pegged to the US dollar. They borrowed money in dollars because their
own currency\'s interest rates were too small. In the middle of 1995, the US
dollar started to rise against most of the world\'s other currencies. Because the

Asian exchange rates of local currencies were pegged to the US dollar they rose
with the US dollar. The rise in value led to the Asian countries decrease in
exports. Their exports became less demanded and competitive in the worlds
market. For the economies to come out of the crisis and return to their normal
sale of exports, they had three options. They would have to let go of the dollar
value, wait for the dollar to depreciate against other currencies or buy local
currency from the moneylenders. They couldn\'t wait for the dollar to depreciate
because they were unsure of how long it might take. At first the Asian countries
borrowed money from the IMF and World Bank in dollars, because they did not have
any fears about earning