There are some interesting lessons about the financial crisis in East Asia Pacific. Before the financial crisis that hit East Asia Pacific, East Asia Pacific region is one of the most have a great potential of the economy. Southeast Asia (Indonesia) has a nickname as the "Asian Tigers" before the crisis came the East Asia Pacific region. The crisis that struck in 1997 has killed the economy of East Asia Pacific region itself (Southeast Asia). Many companies are experiencing financial difficulties due to the closure and the wave of rising unemployment in Southeast Asia. The decline of the East Asia crisis Pacific continue to improve. Build a system that has been damaged due to the financial crisis to economic crisis in the European Union and the United States.
The economic crisis in East Asia Pacific region began in 1997 in the State of Thailand, where in the June 1997 value of the currency and the value of stock markets in Thailand has decreased. In 1995, Thailand experienced a growth rate of 9% and on 14 to 15 May 1997 occurred speculation massive and currency values Thailand (Bath) fall in the market. After Thailand affected by the crisis due to the speculation of the currency and weaken the value of the currency in one after another by the Philippines. To maintain the stability of the Philippine currency (Peso) Philippine central bank authorities raised interest rates from 15% to 24% in one night. Followed by Hong Kong, South Korea, Malaysia, Indonesia, Singapore, and Laos. Malaysia is the fastest country in dealing with the crisis in East Asia for refusing cooperation with the IMF package and the crisis in Indonesia is not only hurting the economy, social and security, too distracted (Read More: 1997 Asia Financial Crisis).
Chart 1
GDP Growth and Inflation in East Asia Pacific
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| Source: World Bank |
Tabel 1
GDP Growth in East Asia Pacific 1990-1999(annual %)
Coutry |
1990 |
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
| Indonesia | 9.00 |
8.93 |
7.22 |
7.25 |
7.54 |
8.40 |
7.64 |
4.70 |
-13.12 |
0.79 |
| Malaysia | 9.01 |
9.55 |
8.89 |
9.89 |
9.21 |
9.83 |
10.00 |
7.32 |
-7.35 |
6.13 |
| Vietnam | 5.105.10 |
5.96 |
8.65 |
8.07 |
8.84 |
9.54 |
9.34 |
8.15 |
5.76 |
4.77 |
| Philippines | 3.04 |
-0.58 |
0.34 |
2.12 |
4.39 |
4.68 |
5.85 |
5.19 |
-0.57 |
3.08 |
| China | 3.80 |
9.20 |
14.20 |
14.00 |
13.10 |
10.90 |
10.00 |
9.30 |
7.8 |
7.6 |
| Thailand | 11.17 |
8.56 |
8.08 |
8.25 |
8.99 |
9.24 |
5.90 |
-1.37 |
-10.51 |
4.44 |
Source: World Bank
The above graph that describes the relationship between GDP and inflation when the economic crisis hit East Asia and the Pacific. GDP experienced negative growth (-1.06%) while 1.57% Inflation rate according to the world bank report. In Asia Pacific, Indonesia Inflation accounts for East Asia and the Pacific region of negative GDP. China one of the countries that are not directly affected by the economic crisis in East Asia and the Pacific. In the Middle of the economic crisis in East Asia Pacific, China GDP growth are positive although down from last year.
Table 2
Inflation GDP Deflator in East Asia Pacific 1990-1999(annual %)
Coutry |
1990 |
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
| Indonesia | 7.72 |
8.83 |
5.36 |
8.88 |
7.78 |
9.70 |
8.85 |
12.57 |
75.27 |
14.16 |
| Malaysia | 3.81 |
3.58 |
2.41 |
3.99 |
3.94 |
3.63 |
3.68 |
3.48 |
8.50 |
0.05 |
| Vietnam | 42.10 |
72.55 |
32.63 |
17.41 |
16.95 |
17.04 |
8.70 |
6.60 |
8.84 |
5.73 |
| Philippines | 12.97 |
16.53 |
7.93 |
6.83 |
9.99 |
7.55 |
7.66 |
6.22 |
22.38 |
6.59 |
| China | 5.84 |
6.85 |
8.24 |
15.12 |
20.61 |
13.74 |
6.44 |
1.51 |
-0.86 |
-1.25 |
| Thailand | 5.77 |
5.75 |
4.49 |
3.29 |
5.21 |
5.59 |
4.01 |
4.06 |
9.24 |
-4.04 |
Source: World Bank
The year 2000 was a new age for the cleanup of the economic crisis in East Asia Pacific. Heavy burden in repairing the destruction of the economy was due to the 1997 crisis. To restore public confidence in the economy, various ways the policy implemented by the government. Many policies have been taken both populist policies and populist policies that are not even in creating economic stability.
Table 3
GDP Growth in East Asia Pacific 2000-2007 (Annual %)
Coutry |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
| Indonesia | 4.92 |
3.64 |
4.50 |
4.78 |
5.03 |
5.69 |
5.50 |
6.35 |
| Malaysia | 8.86 |
0.52 |
5.39 |
5.79 |
6.78 |
5.33 |
5.59 |
6.30 |
| Vietnam | 6.79 |
6.89 |
7.08 |
7.34 |
7.79 |
8.44 |
8.23 |
8.46 |
| Philippines | 4.41 |
2.89 |
3.65 |
4.97 |
6.70 |
4.78 |
5.24 |
6.62 |
| China | 8.40 |
8.30 |
9.10 |
10.00 |
10.10 |
11.30 |
12.70 |
14.20 |
| Thailand | 4.75 |
2.17 |
5.32 |
7.14 |
6.34 |
4.60 |
5.09 |
5.04 |
Source: World Bank
Of the several measures taken by the government in the East Asia Pacific, could increase GDP from negative in 1998 to positive and lower double-digit inflation to single digit. The year 2000 was the year in which the country in East Asia Pacific region to clean up, where homework should be completed soon after the crisis.
Table 4
Inflation GDP Deflator in East Asia Pacific 2000-2007 (Annual %)
Coutry |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
| Indonesia | 20.45 |
14.30 |
5.90 |
5.49 |
8.55 |
14.33 |
14.09 |
11.26 |
| Malaysia | 8.86 |
-1.58 |
3.13 |
3.30 |
6.01 |
8.86 |
3.98 |
4.88 |
| Vietnam | 3.41 |
1.95 |
3.94 |
6.69 |
8.18 |
8.19 |
7.27 |
8.24 |
| Philippines | 5.71 |
5.55 |
4.16 |
3.20 |
5.52 |
5.83 |
4.95 |
3.09 |
| China | 2.06 |
2.05 |
0.58 |
2.61 |
6.91 |
3.93 |
3.79 |
7.60 |
| Thailand | 1.35 |
2.07 |
0.82 |
1.33 |
3.13 |
4.49 |
5.24 |
3.45 |
The crisis in the USA and Europe to bring harm to the economy of Southeast Asia and East Asia Pacific region as a whole. Crises in developed countries initially occurred in the Americas, America is a country known for having abundant capital. In 2001-2005, United hit by the crisis is prolonged. The crisis that originated from the Subprime Mortgage result of default (non-performing loans in the housing sector) and this kind of company bankruptcies. European crisis caused by the threat of default on European countries; Greece, Ireland, Portugal, and Greece.
Table 5
GDP Growth in East Asia Pacific 2008-2011 (Annual %
Coutry |
2008 |
2009 |
2010 |
2011 |
| Indonesia | 6.01 |
4.63 |
6.20 |
6.46 |
| Malaysia | 4.83 |
-1.51 |
7.15 |
5.08 |
| Vietnam | 6.31 |
5.32 |
6.78 |
5.89 |
| Philippines | 4.15 |
1.15 |
7.63 |
3.91 |
| China | 9.60 |
9.20 |
10.40 |
9.30 |
| Thailand | 2.48 |
-2.33 |
7.81 |
0.08 |
Source: World Bank
Many analysts say that Southeast Asia will grow even slightly slowing. As quoted from VOA Indonesia "Shining in the East Asian Companies Corporate Global Crisis". She Southeast Asia are expected to increase by 16.2 percent in quarterly profit. Differences with China and the Asia Pacific region such as Australia which depends on the purchasing power is now very weak. Economic growth in the region is expected to be driven by domestic consumption, driven by fiscal spending, private investment and increased wages. Economic growth in South East Asia will grow 6.5% in 2011 and that number is the highest number since 1996, quoted from the BBC (Indonesia's economy grows at fastest pace in 15 years).
Tabel 6
Inflation GDP Deflator in East Asia Pacific 2008-2011 (Annual %)
Coutry |
2008 |
2009 |
2010 |
2011 |
| Indonesia | 18.15 |
8.27 |
8.11 |
8.40 |
| Malaysia | 10.39 |
-5.99 |
4.08 |
5.46 |
| Vietnam | 22.14 |
6.03 |
11.86 |
20.86 |
| Philippines | 7.55 |
2.77 |
4.22 |
4.06 |
| China | 7.80 |
-0.59 |
6.68 |
7.75 |
| Thailand | 3.93 |
1.95 |
3.66 |
4.23 |
Source: World Bank
It is the growth of the East Asia Pacific region, when the crisis hit the region. Where GDP has decreased to a negative growth and double-digit inflation. Having passed the crisis in the region, disaster came from the Americas and Europe which is the country forward. Financial difficulties default problem has destroyed the continent of Europe and the United. East Asia Pacific region can still grow slowly as it gets lessons from previous crises in 1997.
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