A SIA ’ S L ONG R OAD TO R ECOVERY Group Members: Ms. Nomin Battulga Ms. Nomin Battulga Mr. Lida NO Mr. Lida NO Mr. Tien Nguyen Hung Mr. Tien Nguyen Hung Mr. Irwan Wilhelmus Mr. Irwan Wilhelmus

Asian crisis started in Thailand when Thai government devalued Baht and allowed baht to float in Cause of Asia’s Financial Crisis 1997

Thailand Indonesia Malaysia South Korea The Philippines Countries Most Affected

Recovery Stronger in various economic indicators: ◦ Trade Balance ◦ Foreign currency reserves ◦ Corporate Governance ◦ Financial Market ◦ Government Regulations

Impacts of the Crisis Slow economic growth from 2000 to 2006 (annual growth rates an average of 2.5% below the previous period) No longer being as attractive investment destinations for foreign investors

Other Causes of the Recent Slow Growth Nonperforming bank loans A military coup in Thailand Communist Insurgency in the Philippines Incomplete recovery from the rioting and toppling of the Suharto Government and Bali Bombing in Indonesia

Asia’s Three Rising Stars China: - Becoming the world leading steel producers India: - Becoming global leader in software development and other outsourcing. - Having high growth in manufacturing industry Vietnam : - Having high investment spending

Open Economy Versus Restriction Malaysia: Imposed restriction on the outflow of the money to overcome the crisis China, India and Vietnam: Also had severe limit on the entry and exit of short-term foreign investment from long before the crisis

Lessons From the Crisis Thailand government faced with the large incoming flood of stock and bond investments recently. Thailand Response: ◦ Tax on short term foreign investment ◦ Several adjustments to limit foreign investors who bring large sums into the country for the purchase of fixed-income securities ◦ Required investors to buy three-month forward currency contract, thereby locking the exchange rate and limiting profit opportunity from currency fluctuation

Preparing Asia for the future Asia’s export is highly dependent from Europe and USA Need to rely on domestic market more

THANK YOU!