When the Asian miracle ended: the forgotten financial crisis of 1997/98

Because the region recovered quickly from the economically disastrous financial crisis of 1997 and 1998, the “Asian Crisis” is now almost forgotten. Regarding the global financial crisis of 2007 and 2008, it could and should have served as a warning.

Schoolgirls in Manila donate their hard-earned dollar bills to help the bankrupt Philippine state.

Paulette Marquez/AFP

A quarter of a century ago, the devaluation of the Thai baht began a major financial crisis that shook an entire region. The Asian crisis was foretold by very few observers and hit people in the affected economies particularly hard. Looking back, it is surprising that governments, particularly in industrialized countries, have not drawn any conclusions from the turmoil and have failed to reform financial markets. At the same time, the crisis of 1997 and 1998 marked the beginning of a downturn in the regulation of global financial markets. Asian governments have been frustrated by the United States and other Western industrialized nations for failing to provide them adequate assistance.

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