is devaluation would stop and eventually restore confidence in it’s currency, how would this happen of course? I would assume that Thailand was hoping for a lowering in the price of goods in dollar terms, which would make those products competitive in foreign markets. This in turn would attract new investments into the country. Though this did not happen, and a monsoon of loan defaults and debt resulted, and much of Asia’s financial sector was headed for bankruptcy. With the threat of economic collapse looming Thailand officials sought international help.Who is supporting the growthIn order for many South Asian countries to survive they had to seek help in the form of loans, luckily for them the International Monetary Fund was able to help. The IMF and several Asian countries have so far pledged to provide more than a $100 billion in loans to help save Southeast Asia’s struggling financial systems. Though in return for these loans, recipient countries must implement a series of austerity measures designed to contain the crisis and improve their free-market economic policies. Some of these austerity measures are to increase certain taxes, implement policies to discourage banks from making risky loans and to shut down many of the insolvent financial firms that had planned on being bailed out. Therefore the Asian crisis and the IMF bailout has created a wide-ranging debate on the merits of Asia’s economic model. Though with the debate on how to fix the crisis, it really seems to be just two competing versions of capitalism. The Asian model, set to resemble Japan’s economy, is based on the belief that leaders must take a direct and active role in the free market to assure rapid growth and high employment. The other version is the Western model, modeled after the U.S. economy, which is set to discourage government intervention in the marketplace and largely place faith in the free market to determine the count...
