A Study on the Asian Financial Crisis of 1997: What Triggered the Crisis?

Nur Syazwani binti Haji Md Suif

Abstract


ABSTRACT: Since the 1960s up to 1997, several East and Southeast Asian countries had experienced rapid economic growth. Despite the region’s economic miracle, it eventually faced the financial crisis at the beginning of 1997. Some observers had different opinions as to why the crisis occurred. This paper, using the qualitative approaches and theoretical review, attempts to explore the potential reasons that triggered the Asian financial crisis in 1997. The findings show that there are a number of explanations for the 1997 financial crisis, but none is adequate to completely understand it. According to some observers, the weaknesses of the financial sector are somewhat contributing to the severity of the financial crisis. This paper has also shown various factors in combination, there is no single explanation that is adequate for understanding the crisis. But, it can be argued that the potential triggers to the crisis were the weaknesses of some of the Asian financial sectors – lack of adequate systems of prudential regulation, poor banking supervision, excessive lending before 1997, the practice of crony capitalism (in the allocation of loans), and so forth. So, this paper intends to look at to what extent does the statement is reliable in explaining the occurrence of a crisis.

KEY WORD: Economic Growth; Asian Way; Financial Crisis; Mismanagement.   

IKHTISAR: “Kajian mengenai Krisis Kewangan Asia 1997: Apa yang Mencetuskan Krisis?”. Sejak tahun 1960-an hingga 1997, beberapa negara Asia Timur dan Asia Tenggara telah mengalami pertumbuhan ekonomi yang pesat. Meskipun keajaiban ekonomi di rantau ini, ia akhirnya menghadapi krisis kewangan pada awal tahun 1997. Beberapa pemerhati mempunyai pendapat yang berbeza tentang mengapa krisis berlaku. Kertas kerja ini, menggunakan pendekatan kualitatif dan sorotan teori, cuba mencari kemungkinan sebab yang mencetuskan krisis kewangan Asia pada tahun 1997. Dapatan menunjukan bahawa terdapat beberapa penjelasan untuk krisis kewangan 1997, tetapi tidak ada yang cukup untuk memahami sepenuhnya. Menurut ramai pemerhati, kelemahan sektor kewangan agak menyumbang kepada keterukan krisis kewangan. Kertas ini juga telah menunjukan pelbagai faktor dalam gabungan, tidak ada penjelasan tunggal yang mencukupi untuk memahami krisis. Tetapi, boleh dikatakan bahawa potensi mencetuskan krisis adalah kelemahan beberapa sektor kewangan Asia – kekurangan sistem peraturan berhemat, pengawasan perbankan yang lemah, pinjaman berlebihan sebelum tahun 1997, amalan kapitalisme kroni (dalam peruntukan pinjaman), dan sebagainya. Oleh itu, kertas kerja ini bertujuan untuk melihat sejauh mana pernyataan itu dapat dipercayai dalam menjelaskan berlakunya krisis.

KATA KUNCI: Pertumbuhan Ekonomi; Cara Asia; Krisis Kewangan; Salah Urus.

About the Author: Nur Syazwani binti Haji Md Suif is a Ph.D. Candidate at the Department of History and International Studies, Faculty of Arts and Social Sciences UBD (University of Brunei Darussalam) in Bandar Seri Begawan, Negara Brunei Darussalam. For academic interests, the author is able to be contacted via e-mail at: nssuif@gmail.com

Suggested Citation: Suif, Nur Syazwani binti Haji Md. (2018). “A Study on the Asian Financial Crisis of 1997: What Triggered the Crisis?” in SUSURGALUR: Jurnal Kajian Sejarah & Pendidikan Sejarah, Volume 6(2), September, pp.109-116. Bandung, Indonesia: Minda Masagi Press and UBD Bandar Seri Begawan, Brunei Darussalam, ISSN 2302-5808.

Article Timeline: Accepted (July 3, 2018); Revised (August 31, 2018); and Published (September 30, 2018).


Keywords


Economic Growth; Asian Way; Financial Crisis; Mismanagement

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