TWN Global Economy Series no. 27 The Global Economic Crisis and Asian Developing Countries: Impact, Policy Response and Medium-Term Prospects By YILMAZ AKYÜZ Publisher: TWN (ISBN: 978-967-5412-33-2) Year: 2010   No. of pages: 64

ABOUT THE BOOK

This paper looks at the effects of the global economic crisis on the developing economies of Asia, their policy response to shocks and their medium-term growth prospects.

The global crisis has uncovered systemic and structural weaknesses and vulnerabilities in certain areas in the economies examined here and strengths in others. In almost all countries the financial sector has shown a significant degree of resilience to shocks from the global crisis. However, a common feature of the countries examined is their high degree of susceptibility to financial boom-bust cycles and gyrations in equity, property and currency markets. This crisis has shown the risks of full integration with markets in global financial centres and the need to adopt a strategic approach to financial opening and integration.   

The crisis has also uncovered a high degree of vulnerability of the developing economies of East Asia to trade shocks, raising the question of whether the end of export-led growth has been reached. With unfavourable global economic conditions likely to persist, the paper underscores the need to reduce the dependence of the region on markets in advanced economies and to rebalance domestic and external sources of growth.

This paper was prepared as part of a Third World Network research project on financial policies in Asia directed by Yilmaz Akyüz.

ABOUT THE AUTHOR

YILMAZ AKYÜZ is Special Economic Advisor to the South Centre and former Director of the Division on Globalization and Development Strategies at the United Nations Conference on Trade and Development (UNCTAD).

Contents

1 INTRODUCTION                                                                         

2 THE GREAT FINANCIAL BUBBLE, GLOBAL EXPANSION AND IMBALANCES  

3  ASIAN VULNERABILITIES AND SPILLOVERS FROM THE CRISIS          

    Losses on foreign asset holdings                                                      

    Capital flows and financial and currency instability                            

    Remittances                                                                                   

    Export shocks                                                                                  

4 POLICY RESPONSE AND RECOVERY                                  

5  MEDIUM-TERM PROSPECTS AND POLICY CHALLENGES           

    Adjustment and growth in major advanced economies                       

    Sustaining rapid growth in Asia                                                        

6 CONCLUSIONS: POLICY ISSUES AND LESSONS                

References    

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