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 You are in: Special Report: 1997: Asian economic woes  
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Wednesday, 28 January, 1998, 11:44 GMT
How the financial crisis could affect you

Click map to reveal briefings and background from BBC specialists

It's been a traumatic few months in the world's financial markets - not least in Asia. The devaluation of the Thai baht in July started a chain of devaluations across South East Asia. What was first seen as a regional crisis became a global problem when currency speculators attacked Hong Kong's long standing link with the US dollar. At one stage Hong Kong shares lost nearly half their value and there were huge stock market falls elsewhere.

Now the crisis has spread to South Korea: The world's 11th largest economy has had to go cap in hand to the IMF for a massive loan. And the weaknesses of the Japanese economy were recently exposed by the collapse of Yamaichi, one of Japan's largest and most prestigious financial houses. The fear now is that Japanese banks which have played a key role in financing recent Asian economic growth may pull back - plunging the region into even further turmoil.

Little wonder that the US State department has warned this week of the dangers of financial insecurity spreading to the west, giving everyone else a nasty bout of Asian flu.

And yet for decades the so-called Asian Tigers were been seen by many as a model of economic development. Thailand, Malaysia, Korea and Indonesia enjoyed a boom which lifted millions out of the slums and shanties. Across the region gleaming new office blocks, factories and skyscrapers emerged, along with educated elites with money to spend on luxury goods and services. Western nations - mired in a period of low growth and economic stagnation -- looked on enviously at the consistently high rates of growth and productivity. But now it seems the bubble may have burst and the effects are being felt right across the region.

But is this alarm justified? Or will it prove as unbalanced as the euphoria which has until now been the economic orthodoxy? And how will this turmoil on the markets affect the real economy: jobs, homes, our sense of well being and security?

Click on our interactive map to reveal a range of background briefings from BBC correspondents and analysts. Their reports aim to put the events of the past few months into perspective, explaining the root causes of the current crisis and charting the possible consequences for all of us.

Links to more Asian economic woes stories are at the foot of the page.


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Links to more Asian economic woes stories

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