The Asian financial crisis (Tom Yum Kung Crisis)
Economics is manages limited resources for demand of human unlimited need. That includes business, finance, government, law and etc. Economic is indicator of the country’s development and every country have problem about economic and trade. The economic crisis will arise from a variety of different causes. The economic crisis, that bring for example because there’re very important and more impact. In 1997, The Asian financial crisis is important crisis in Asia, the crisis started in Thailand called “Tom Yum Kung crisis”. The Asian financial crisis has effect with many countries in Asia and cover issue of finance and development. South Korea, Thailand and Indonesia were most affected by the crisis. The Philippine, Laos, Malaysia and Hong Kong were also recession. Other countries that were less affected are Taiwan, Vietnam, Singapore, China and Brunei. The cause of the Asian financial crisis is the prosperity of Thailand made financial liberalization in that period. In that time, Paul Krugman is economists who don't agree with the way in which the growth of the economy by incoming country from foreign investment but the country's exports was no increased. The foreigners come to invest is not wealth over the long term, but the number of export is the long-term prosperity. Financial liberalization means no access control of foreign exchange. That good for convenient to foreign investment and business but it could damage the economic, because it is difficult to control. That period Thailand’s economic is good and hopes to become a financial center. When Thailand’s financial liberalization had “hot money” (the loan from many foreign countries to meet their own needs) become less export and more import. People can buy everything that they want such as brand name product or car from foreign countries. When Thailand had more imports and less exports that was problem in economic because Thailand can’t earn money from export for refund loans. So, that problem made stop the loan but when stop loans make impact on the business, the bank and etc. That the cause of Thailand crisis and spread to other countries in Asia like the domino effects is devaluation of the Thai baht and impact on other countries. At that time spent foreign exchange reserves (foreign assets controlled by the central banks of each country can bring out when country have economic crisis) and announced floating of the baht. This crisis, Thailand made letter of intent for IMF (International Monetary Fund) assistance. The result of a request for help made the IMF to intervene in the government of Thailand and other countries also request IMF for help too. For example, I will describe about the Asian financial crisis or Tom Yum Kung crisis in Thailand.