The Asian financial crisis, which began on 2 July 1997, when the Thai government could no longer defend the Baht against the US dollar, soon spread to neighbouring countries and affected the whole of East Asia. As Francois Godement put it, ‘the basic cause for the crash must be identified as the confrontation between global market forces and local institutions which have not adapted well enough to new realities. The crisis wreaked havoc throughout the sub-region and most of the affected countries had to go cap-in-hand to the IMF. It exposed the weakness of the claims made an Asian economic miracle and it weakened several of the resident governments, undermining altogether that of Indonesia. It also undermined faith in the so-called Washington consensus of free markets, including free capital flows and floating currency values, as the United States and the American-based international financial institutions were more concerned to ensure the restitution of foreign investors and speculators than to protect the interests of the affected countries, who suddenly found 200 million people (about a quarter of the population of these countries) thrust back into poverty. Fortunately the region’s economy was able to recover relatively quickly.