Economics of Asia
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The economy of Asia is a Economy in Modern Asia that has filled news reports for more than a decade. As reported by television networks, newspapers, and journals, the economy in Asia has expanded and contracted during the 1990s. The transition from boom to bust has had a devastating impact on the countries in the Asian region.
In the early 1990s, news of the Asian Tigers dominated global business world. As the success of these countries became well known, industries and private investors poured money into the Asian region. In many Asian countries, the economic boom produced a building boom. The building boom created jobs and wealth for many industries in Asia. As optimism spread, so too, did uncontrolled spending in public and private sectors. This uncontrolled growth was partially responsible for the later collapse of the economy.
Economy and Uncontrolled Growth n Modern Asia
Aside from the uncontrolled growth, the actions of some of the Asian governments in pegging their currency to the U.S. dollar promoted the depth of the crisis. A lack of control over the value of their currency resulted in losses in the export market. As the U.S. dollar started to rise against other world currencies, the Asian currencies that were pegged against the dollar also rose. This made Asian exports too expensive to compete effectively in the global market. Many Asian governments were forced to devalue their country's currency as a result.
Unchecked speculation was another contributing factor to the recent Asian economic crisis. Excitement over the emerging Asian markets and cheap labor prompted many investors to invest heavily in the Asian stock markets. In the beginning days of the economic crisis, many investors pulled their money out of the Asian stock market. As foreign sources of financing dried up, many Asian corporations were left with no other option but to file for bankruptcy.
The Asian Financial Crisis
Years before the Asian financial crisis, several Asian countries were singled out as experiencing unprecedented growth rates. These countries were able to create high-tech and high-quality manufacturing facilities that produced goods comparable to or better than those produced by developed countries. For many years, countries were able to export products that were in high demand such as:
- Hong Kong
The economic boom allowed citizens within the country to achieve higher quality living standards and allowed the governments of the countries to improve public services.|
The effects of the Asian economic crisis were global in nature. Within a very short time, the economic shocks felt in the Asian region transferred to other developing and developed countries. For example, the countries of South America experienced great economic hardships shortly after the Asian Tigers and Baby Tigers called on the IMF for help.