Resent Collapse of Financial Sector in Southeast Asia in 1997 Essay

Resent Collapse of Financial Sector in Southeast Asia in 1997 - Essay Example Maintenance of sufficient current account balance is identified as the successful management strategy to prevent these financial crises in future. The secondary source of information revealed some more meaningful strategies. South East Asia comprises of nations like Malaysia, Singapore, Thailand, Vietnam, Philippines, Indonesia, Hongkong and South Korea. They were recognized as tiger economies as the rate of economic growth was quite phenomenal within a short period. However, the economies of South East Asian countries witnessed a debacle in 1997-1998 leading to the sudden collapse of the financial sector. The South East Asian financial meltdown, experienced in late 1997, was considered to be one of the most serious financial debacles we have had since the 1930s. Approximately an amount of more than a trillion dollars was eroded during this crisis. It took considerably longer period for all these nations to witness the past glory, to recover from this financial crisis. However, there was a substantial recovery in some of the region's markets and investors sorted out specific strengths and weaknesses, differentiating among national economies. The weaknesses in financial markets of China and Japan were als o exposed. Hence there is a strong need to study and analyze the factors responsible for this debacle so that efficient management measures can be taken for preventing the similar type of incidents in future. Keeping this in view the present study is being formulated with the following research aim and objectives. Several researchers documented the causes for South East Asian financial crisis of 1997 (FN 1, FN 2, FN 3 and FN 4, FN 5 and FN 6, FN 7 and FN 8, FN 9). The East Asian financial crisis was reported to be originated in July 1997 in Thailand and it severely affected currencies, stock exchanges and other asset prices in several Asian countries, many considered Tiger economies (FN 10).