A Thai Post Mortem

CAMBRIDGE: There are lessons from Thailand’s currency debacle beyond the sheer fun of pointing fingers. For how can a country reach meltdown proportions when, only a few months back, barely a problem existed. And if “tiger economy” Thailand can get into big trouble, woe to Latin America and some postcommunist countries.

[html1]

Thailand’s problem, like Mexico a few years ago, was its vulnerability, meaning that if one thing in the economy goes wrong, suddenly many things go wrong. The cause of Thailand’s crisis was the combination of a shaky banking system (made shakier by the dollar debts of its clients), a large, short-dated foreign debt with the resulting risk of a funding crisis, and a total lack of transparency coupled with a pervasive overlay of corruption. In Thailand, almost every politician or official had his hands in the pocket of some bank or business; every bank had officials in its pockets, too.

To continue reading, please log in or enter your email address.

Registration is quick and easy and requires only your email address. If you already have an account with us, please log in. Or subscribe now for unlimited access.

required

Log in

http://prosyn.org/bmR4sM6;