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Beyond the IMF Medicine: Thailand's Response to the 1997 Financial Crisis

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  • Shalendra D. Sharma

Abstract

From the summer of 1997 through summer 1999, Thailand's economy took a steep plunge into recession and economic collapse. Only in the third-quarter of 1999, did the economy give signs of a fragile, if hesitant recovery. Almost immediately the International Monetary Fund(IMF) took credit, arguing that its policies and programs were finally producing results. How valid is this claim. This paper argues that the IMF policies by itself cannot explain the recovery. Indeed, if the Thai government continued to follow the IMF's orthodox prescriptions, it would have dragged the economy further into crisis. Rather, it is argued that the Chuan administration deserves much credit for the recovery. By rejecting some of the IMF's mis-guided policies and by its effective management of the crisis, the Chuan government laid the basis for a gradual and sustained recovery.

Suggested Citation

  • Shalendra D. Sharma, 2002. "Beyond the IMF Medicine: Thailand's Response to the 1997 Financial Crisis," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 5(1), pages 27-49, March.
    • Handle: RePEc:sae:intare:v:5:y:2002:i:1:p:27-49
    DOI: 10.1177/223386590200500102
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    References listed on IDEAS

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    1. International Monetary Fund, 2000. "Thailand: Selected Issues," IMF Staff Country Reports 2000/021, International Monetary Fund.
    2. George Soros, 1999. "The International Financial Crisis," Challenge, Taylor & Francis Journals, vol. 42(2), pages 58-76, March.
    3. Alba, Pedro & Hernandez, Leonardo & Klingebiel, Daniela, 1999. "Financial liberalization and the capital account : Thailand, 1988-97," Policy Research Working Paper Series 2188, The World Bank.
    4. Ha-Joon Chang & Gabriel Palma & D. Hugh Whittaker (ed.), 2001. "Financial Liberalization and the Asian Crisis," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-51862-9, December.
    5. Stephan Haggard, 2000. "Political Economy of the Asian Financial Crisis, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 107, January.
    6. Ijaz Nabi & Jayasankar Shivakumar, 2001. "Back from the Brink : Thailand's Response to the 1997 Economic Crisis," World Bank Publications - Books, The World Bank Group, number 13973.
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