Indonesia, already battered by a currency and banking crisis, was the worst affected by smog and fire-related damage.
In 1997 and 1998, the fires affected an area three times the size of the UK.
The blazes were made much worse by prolonged drought, and the severe El Nino weather phenomenon, which dried out the usually lush rainforests and left them more susceptible to fire.
According to the Worldwide Fund for Nature, the outbreaks of fire and smog cost the region up to $6bn.
At the time, experts warned that it could take years for the region to recover, and that if the haze ever returned, industrial production would be devastated.
And this year, the countries affected by the smog are in even more perilous economic positions than before.
Vicious circle
The total loss of land was estimated at a million acres, and the resulting smog made 20 million people ill.
Indonesia, already battered by a currency and banking crisis, was the worst affected by smog and fire-related damage.
Agricultural output plummeted, health and medical bills skyrocketed, and there was a sharp decrease in tourism - a key source of foreign currency.
Transportation was disrupted by collisions on the roads and at sea, and a number of air disasters were blamed on poor visibility caused by the smoke.
And the economic crisis exacerbates the environmental one.
Employees become ill or spend time fighting the fires. And with their workplaces forced to shut, people cut down trees for money and plantation companies attempt to recoup their losses by clearing more land for crops.
Out of control
The region's ministers agreed in 1997 that the only way to avoid a repeat of the environmental disaster was to prevent the fires from being started in the first place.
But by 1998, the fires reached such a scale that the only thing that could put them out was the arrival of the rains.
In December 1997, Indonesia announced a crackdown on new investment in palm oil plantations and individual companies known to have used burning to clear land.
But the fires were burning again just two months later.
The Indonesian environment minister himself has admitted that the laws against burning land are impossible to enforce in the remote forests.
With no way to stop fires being started and scant resources to put the blazes out, the region looks set for another major ecological disaster.