Thailand: The Asian Financial Crisis and Social Changes

Sauwalak Kittiprapas

Chapter 4 in The Social Impact of the Asia Crisis, 2000, pp 35-56 from Palgrave Macmillan

Abstract: Abstract In Thailand, the 1997 financial crisis has resulted in adverse impacts on economic and social systems more seriously than anyone could anticipate. This crisis originated from problems in many sectors: finance, real production, government and management. Since financial liberalization of the early 1990s,1 foreign capital has been attracted to the country by high profit margins in stocks, high interest rates, and a relatively lower risk in Southeast Asia, due to the US dollar-pegged currency (Lauridsen 1998). With cheaper interest rates for off-shore loans and a perceived fixed exchange rate, the Thai private sector continued to borrow. This increased the burden of foreign debt. Without effective management and supervision, the increasing capital inflows mostly came in the form of short-term loans and went into speculative (such as real estate and stock market) rather than productive sectors. Excessive private investment, particularly in risky and non-tradable sectors, and property price inflation soon led to a bubble economy. The increased overconsumption and the high investment–savings gap in the economy caused the balance-of-payment deficit to blow out.

Keywords: Social Capital; Unemployment Insurance; United Nations Development Programme; Asian Development Bank; Asia Crisis (search for similar items in EconPapers)
Date: 2000
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-333-97801-6_4

Ordering information: This item can be ordered from
http://www.palgrave.com/9780333978016

DOI: 10.1057/9780333978016_4

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().