Impact of the Asian Financial Crisis in 1997 and Effect to...

Impact of the Asian Financial Crisis in 1997 and effect to Latin America Name: Institution: Date: Abstract In 1997, the Asian Financial Crisis spread rapidly all over the Asia and affected almost all the economies in the world. Prior to the Asian Financial Crisis, the Asian countries such as Thailand, Malaysia, South Korea, Indonesia, Hong Kong and Singapore experienced a remarkable growth in the economy that was considered the highest in the world. These Asian economies increased by a notable proportion of 6 to 10 percent annually in the GDP. However, what had been regarded as an Asian miracle seemed to crumple down rapidly 1997 when these Asian countries were faced with a severe financial crisis in their local stock and currency†¦show more content†¦Regardless of the negotiations for support grant from the IMF and the United States Treasury, the monetary drainage persisted and Brazil was forced to devalue its currency. As a result, the Brazilian government authorized the real to float, while it abandoned linking its currency to the U.S. dollar. The financial crisis in Brazil sp read out rapidly to other nations in Latin America and as a result several billions of dollars were drained from these countries and this hindered the trade exchange with the United States. As a result, the nations in the Latin America experienced one of the nastiest economic recession that was mainly fuelled by the Asian financial crisis. The effect of the financial disaster was predominantly severe in the Latin America’s small economies, for instance Bolivia, Uruguay, Ecuador, Chile and, Argentina and Colombia (Hunter, 1999). Petti (2001) argues that financial shocks can move rapidly throughout the nations within similar regions as it was revealed by the Mexican peso disaster that occurred in the year 1994. Similarly, the financial crisis that affected the Asian countries proved to be a regional financial crisis and it threatened geographically distant vibrant economies mostly in the Latin America. The Latin America countries began experiencing the effects of the Asian financial crisis in 1997Show MoreRelatedImpact Of The Asian Financial Crisis Of 1997 On The Region s Development1704 Words   |  7 PagesExamine the impact of the Asian Financial Crisis of 1997 on the region’s development â€Å"Since World war II, development has been the most important term used to describe economic, social and political changes in what have come to be known as Third world countries† (Zhang, 2003). The Asian financial crisis of 1997 had a major impact on the regions development as it was the end of the East Asian economic miracle, a time that showed staggering economic growth throughout the Asia Pacific. 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