Development Analysis Network - August 1999
Impact of the Asian Financial Crisis on the Southeast Asian Transitional Economies
English 175 pp.

Foreword 

Since August 1997, a network of Southeast Asian research institutes—the Development Analysis Network—has been undertaking collaborative work. With initial funding from the United Nations Development Programme, two meetings were held in Bangkok (August 1997) and Hanoi (December 1997), at which a programme of collaborative research was drawn up. The institutes participating in these meetings were the Cambodia Development Resource Institute, the Cambodian Institute for Cooperation and Peace, the National Economic Research Institute in the Lao PDR, the National Statistical Center also in the Lao PDR, the Central Institute for Economic Management in Vietnam, and the Thailand Development Research Institute. As problems arose with UNDP funding, the Development Analysis Network obtained support from the International Development Research Centre for research, a workshop and a conference (held from 19–22 January 1999 in Phnom Penh) on the Impact of the Asian Financial Crisis on the Southeast Asian Transitional Economies (SEATEs). At the workshop, it was agreed to expand the network by adding a seventh member, the Institute of Economics from Vietnam.

This volume consists of a collection of the papers presented at the conference held in Phnom Penh, attended by about 100 participants, and opened by the Cambodian Minister of Finance. Each country paper was presented and discussed in turn. A comparative discussion of the impact of the crisis on the three SEATEs, and of policy responses to it, was then introduced by Toshiyasu Kato of the Cambodia Development Resource Institute. Finally, a panel discussed the lessons of the crisis for future policy-making. The relatively short presentations left plenty of time for contributions from the floor, and the debate was unusually lively.

In general, the main impression gained by conference participants was that, even though the impact of the Asian crisis began to be felt by the SEATEs in 1998, each was rather more affected by its own domestic crisis. In Cambodia, the July 1997 fighting in Phnom Penh had a major negative impact on the economy. Relaxed monetary and fiscal policies in the Lao PDR exacerbated inflation and the depreciation of the kip. Vietnam’s transition to a market economy ran into trouble as inefficient state-owned enterprises and cumbersome domestic rules and regulations impeded the development of the private sector. As for lessons from the crisis, all three SEATEs recognised the need to develop robust financial systems. Thai experience in this respect provided useful insights for the SEATEs, where financial development is still at a relatively early stage.

Meanwhile, it is hoped that the collaboration between these Southeast Asian research institutes initiated by this study will continue. The Development Analysis Network has plans for further research, and there are regional issues enough to keep it going for many years to come.