Another important problem before the crisis was the use of the wrong paradigm to
judge the inherent risks in the situation. The clearest case was the inattention paid to shortterm
foreign debt. The adequacy of foreign reserves was still being judged using a paradigm
of current account problems, so foreign reserves were being compared to months of imports.
However, the problem that was developing at the time was a capital account problem, so
reserves should have also been compared to the amount of short-term foreign debt that the
reserves might have to service if the debt were not rolled over. Therefore, even though the
ratios of short-term debt to foreign reserves were greater than one in all the three countries
that eventually had to seek IMF assistance, the danger of a crisis was not foreseen simply
because the right kind of data were not looked at.