20 years on, scars from Asian financial meltdown linger

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buksida
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20 years on, scars from Asian financial meltdown linger

Post by buksida » Thu Jun 29, 2017 6:01 pm

It's been 20 years since a financial meltdown spread through much of Asia, wrecking economies and bringing down governments.

They've long since recovered and, analysts say, are now stronger for the experience. But in Thailand -- the epicentre of the crisis -- the anniversary brings back painful memories for those who lived through it, and lost everything.

''It was like there was no way out for many of us,'' said Supop Pavanan. Today he makes a comfortable living selling Buddhist amulets at his Bangkok shop and over the internet, but two decades ago he was among millions of victims of the great Asian crash.

Thailand's boom of the mid-1990s, fuelled by unrestrained borrowing and a corrupt, lax finance system, collapsed on July 2, 1997, when the government devalued the baht. The currency sank, ruining companies and individuals almost overnight and starting a chain reaction that spread across borders.

Soon, many of Asia's tiger economies were skinned alive.

Recessions struck from South Korea to Indonesia and millions were thrown out of work as investment and real estate bubbles burst, roiling global markets.

Bangkok came to resemble a giant flea market. Wealthy Thais sold their luxury goods at knock-down prices in parking lots. Cars, jewellery, vintage wine -- even personal aircraft -- all had to go.

''The worst thing was not knowing what would happen to you,'' said Mr Supop, who had been an overseas tour guide but was laid off. He ended up selling fish balls from a street stall and his income fell from $3,000 in a good month to $200, if he was lucky.

He stuck at it for a year before beginning a slow climb back out of the economic depths.

''You couldn't apply for a job because no one would give you one,'' he said. ''You couldn't sell goods because no one was buying. You couldn't get a loan for an investment because no one was giving them.'' (continued below)

Anger grew as unemployment soared. The government fell. Thailand ended up taking a bailout from the International Monetary Fund.

Source: http://www.bangkokpost.com/business/new ... own-linger

Thought: most expats are hoping for another baht crash but what are the realistic chances of it happening again?
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Re: 20 years on, scars from Asian financial meltdown linger

Post by Spitfire » Thu Jun 29, 2017 6:44 pm

Thought: most expats are hoping for another baht crash but what are the realistic chances of it happening again?
As long as the BoT is manipulating the currency at the request of local dark forces, then no chance...just depends how long they can manipulate it for. When they can't do it anymore or a bubble bursts beyond their control, then the rich Thai-Chinese elite will cash in on their foreign assets and bring the profits home so they can be even richer and perpetuate the status quo as one of the most unequal societies in the world.

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Re: 20 years on, scars from Asian financial meltdown linger

Post by handdrummer » Thu Jun 29, 2017 6:58 pm

if the baht crashes, expats (a disgusting word) will have more baht and much less to purchase. I, for one, do not want to see the economy wrecked. it will do no one, save the wealthy with foreign investments, any good and demoralize the nation, whose people already have inflated and fragile egos.

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Re: 20 years on, scars from Asian financial meltdown linger

Post by HHTel » Thu Jun 29, 2017 8:01 pm

The devaluation by the government of the time wasn't the cause of the crash. Money was flowing out of Thailand before this because of the devaluation of the Yuan and Yen and the US economy was booming and interest rates were high. Nobody was buying baht, they were selling. The government wrongly pegged the baht to the dollar and propped up the exchange rate using their reserves of foreign currency.
Basically, Thailand ran out of dollars and had to 'unpeg' the baht to the dollar. The baht immediately sank.

If the baht had been floated against the dollar, then the crash wouldn't have been so quick and so severe.

Of course, the government, being Thai would never admit it was partly down to their own policies. "It wasn't our fault, it's those nasty foreigners!"

If indeed the baht is being propped up falsely, then the whole scenario could happen again.

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Re: 20 years on, scars from Asian financial meltdown linger

Post by caller » Thu Jun 29, 2017 9:09 pm

HHTel wrote:
Thu Jun 29, 2017 8:01 pm
If indeed the baht is being propped up falsely, then the whole scenario could happen again.
Well that's certainly the perceived view and exporters have been screaming out against the high value of the baht. So if true, the Government's cash reserves must be limitless!
Talk is cheap

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Re: 20 years on, scars from Asian financial meltdown linger

Post by PeteC » Thu Jun 29, 2017 9:15 pm

^ Why would anyone think that this issue and a few dozen others since 2014 is not all smoke and mirrors?
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