Asia-Pacific Economic Update 2002, Volume One: Economic Strategy, Context and Performance [open pdf - 9MB]
"Financial turmoil was prevalent throughout the 1990s. Financial crises broke out in Europe, Latin America, and Asia. High current account deficits and rigid exchange rate regimes contributed to financial turbulence and a disorderly freefall of Asian foreign exchange rates. Floating exchange rate regimes are needed to optimize free international capital markets. Meanwhile, Asia's economic roller coaster shows no signs of stopping. The past five years have seen an economic crisis in 1997, recession in 1998, a bounce-back in 1999-2000, and a downturn and recession in 2001. Much of the Asian bounce-back reflected a surging U.S. economy in 1999 and 2000. But the fuel for this U.S. growth disappeared in 2001 when the global information technology (IT) sector went from boom to bust. During the boom too many Asian economies became complacent and avoided painful structural reforms. That made them increasingly vulnerable to the U.S. recession and global slowdown. Asian states will remain economically insecure until they become more serious about implementing structural economic reforms. The terrorist attacks of I 1 September 2001 worsened an already weak U.S. and global economy. After 9-11, the USG faced economic issues on at least three fronts: reconstruction in New York City, fighting recession at home, and using economic diplomacy to help the U.S. coalition in the war on terrorism. All three issues required immediate crisis action. But a long-term strategy in each area is also needed to put the United States and the global economy on a sustainable path toward long-term economic growth."
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