1997 Asian financial crisis

The Asian financial crisis was a period of financial crisis that gripped much of East Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion.

Quotes

• The one on the right concerned the shift from an older understanding of economic liberalism to what is now called "neoliberalism." Neoliberalism is not... a synonym for capitalism. I don't see how you can have any kind of modern economy without a market based economy. Neoliberalism took that basic insight and stretched it to an extreme seeking to deregulate, privatize and basically pull back the role of the state, which many neoliberals regarded as simply obstacles to individuals, to entrepreneurship, to economic growth, and as a result markets did their usual work. They produced a great deal of inequality, as... global corporations searched for very small cost advantages by moving jobs to low cost areas... [T]hey destabilized the global economy in certain important ways by deregulating the financial sector. As a result of the deregulation that occurred in the 1980s and 90s we had an escalating series of financial crises. In the sterling crisis, the Asian financial crisis, Argentina, Russia, and finally culminating in the big American subprime crisis in 2008. The... cumulative effects of this instability were political and they were very serious because many ordinary people were hurt... a lot of people lost their homes, lost their jobs, and the elites that ran these big banks and financial institutions suffered only a momentary disruption in their incomes, and went on to continue to dominate their respective economies... [T]his had a direct impact on the rise of populism in subsequent years, both on the right and on the left.
  • Francis Fukuyama, A YouTube Creative Commons video, Francis Fukuyama - Liberalism for the Twenty-First Century (May 31, 2022) from the YouTube channel IIEA, representing The Institute of International and European Affairs, Ireland’s leading independent, not-for-profit international affairs think tank providing a debate and discussion forum to evaluate and share policy options for EU and International affairs, 12:54

• The interesting thing is that, on the whole, the economics profession didn't learn the lessons of the East Asian crisis. I wrote about it a great deal, and I continued to do some research on the subject. But because we didn't learn the lessons of that crisis, we've had the crisis that began in 2007.
  • Joseph E. Stiglitz, Trinity's Nobel Economists Lecture, September 2009, published in Lives of the Laureates: Twenty-three Nobel Economists (2014) edited by Roger W. Spencer, David A. Macpherson

• Everyone in the world needs money – to get paid, to trade, to live. Paper money is an ancient technology and an inconvenient means of payment. You can run out of it. It wears out. It can get lost or stolen. In the twenty-first century, people need a form of money that's more convenient and secure, something that can be accessed from anywhere with a PDA or an Internet connection. Of course, what we're calling 'convenient' for American users will be revolutionary for the developing world. Many of these countries' governments play fast and loose with their currencies. They use inflation and sometimes wholesale currency devaluations, like we saw in Russia and several Southeast Asian countries last year [referring to the 1998 Russian and 1997 Asian financial crisis], to take wealth away from their citizens. Most of the ordinary people there never have an opportunity to open an offshore account or to get their hands on more than a few bills of a stable currency like U.S. dollars. Eventually PayPal will be able to change this. In the future, when we make our service available outside the U.S. and as Internet penetration continues to expand to all economic tiers of people, PayPal will give citizens worldwide more direct control over their currencies than they ever had before. It will be nearly impossible for corrupt governments to steal wealth from their people through their old means because if they try the people will switch to dollars or Pounds or Yen, in effect dumping the worthless local currency for something more secure.
  • Peter Thiel, In a speech delivered at PayPal in 1999, as remembered by Eric M. Jackson in The PayPal Wars