Before and After the Crisis
Chapter 15: Economic recovery and growth prospects
Chapter 10 described the 1997 Asian crisis and its economic implications for the ASEAN countries. It was shown that the crisis has significantly stalled the economic progress experienced by these countries and set back the economic and social gains they have achieved in the past decades. After two turbulent and devastating years, their economies seemed to have turned the corner. During the years 1999 and 2000, their currencies started to stabilize (except for the June 2000 slide of the Indonesian rupiah), interest rates were much lower compared to their crisis levels, exports were up, and most economic pundits expected another year of positive growth. But the first eight months of 2001 have seen some signs of economic slowdown with weaker export growth for the ASEAN countries. The tragic terrorist attacks of 11 September 2001 have only further dampened the short-term economic outlook for the ASEAN countries.1 Will the ASEAN countries be able to recover and get back to their pre-crisis growth path? What are the key external and internal obstacles that may threaten their economic recovery and long-term growth prospects? This chapter will try to address these questions as the ASEAN countries are trying to cope with the aftermath of the 1997 economic crisis and the current global slowdown. 15.1 SIGNS OF ECONOMIC RECOVERY IN 1999 AND 2000 Strong signs of economic recovery in the region have emerged for two consecutive years after the end of the crisis. As Table 10.3 indicated, the ASEAN economies, after experiencing negative or low...
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