Impact Of The Asian Economic Crisis
The current economic crisis is deepening in Asia with exports hitting rock bottom, GDP’s sinking, fiscal deficits ballooning and suicide rates rising. In January, Japanese exports nearly halved since the year before, Taiwanese exports fell 42 percent and Hong Kong’s GDP is expected to contract by 2~3 percent this year.
While the three financial crisis in recent economic history (1997-98, 2001 and 2008-09) cannot really be compared, similarities do echo between the three in terms of there being a mass exodus of money from Asian nations, government aided stimulus packages to resuscitate the economy and social, trade and political upheaval.
It is also interesting to note that the four Asian nations - Japan, Hong Kong, Thailand and Malaysia - which are coupled to the west have been the most affected during all three crisis. Further, economic reactions were similar in all three crisis - currencies plunged, GDP’s dipped and stock markets slipped, prices of assets such as real estate and automobiles fell, interest rates dropped and jobs were lost across the region.
Nonetheless, Asia has learnt her lessons from the previous two crisis and is working towards rectifying the situation to rebuild a stronger region. Now, Asia is more integrated, governments have implemented stronger banking and financial polices and governments have made sure they have deep pockets which can help them in case of another crisis.
Regional banks such as the Asian Development bank are pumping money into Asia, governments are working together to support intra regional trade and reduce barriers and regional organisations such as ASEAN are collaborating with governments to bouy economies out of the crisis, help keep jobs and improve Asia’s standard of living.
This article was written by Nazia Vasi for 2point6billion.com, a commentary and news forum about business in Asia.
The forum is managed and contributed to by the foreign direct invesment law and tax practice Dezan Shira & Associates.
Nazia Vasi writes for the China business news website China Briefing. She currently works for the China business law and tax practice Dezan Shira & Associates.
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