Ten years ago, an unprecedented financial crisis swept through East
Asia requiring the biggest country bailouts in history. VOA's Heda
Bayron in Hong Kong looks back at the turbulence that began in July of
1997 and how Asia emerged from the crisis.

Raden Pardede
Along with much of the rest of Asia, in 1997, Indonesia suddenly
spiraled into recession. Companies closed down, and workers lost their
jobs.

Raden Pardede remembers those days. He is the deputy president
director of the Indonesian government agency responsible for selling
the assets of those bankrupt companies. "That's basically one of the
biggest crises in our lifetime, because after that, I think in 1998,
our economy really significantly collapsed, which in terms of GDP
growth we had a 13.5 percent negative growth. So the world collapsed.
After that, of course, most of the conglomerates collapsed, right?
That's why we had significant unemployment soon after 1998. The middle
and lower income groups really suffered."

The Asian financial crisis was almost unthinkable at the time. Asian
economies were soaring. Companies were expanding aggressively, stock
markets skyrocketing, fueled by foreign capital.

But the bubble burst, first in Thailand, where companies had
overloaded on foreign debt. Worried investors began selling the Thai
baht and it rapidly lost value against the dollar.

Panic spread. The Indonesian rupiah, the South Korean won, the
Malaysian ringgit and other currencies sank. Stock markets plunged and
interest rates soared.

Governments used up foreign exchange reserves to stop the currency
depreciation, lent money to cash-strapped companies and bought shares
in stock markets. But the crisis continued and millions were jobless.

Indonesia and South Korea asked the International Monetary Fund to
bail them out.

Park Yung-chul
Park Yung-chul, an economist at Seoul National University, says the
bailout was a blow to South Korea. "People's first reaction at that
time was shame. We were the 11th largest economy in the world. Big
South Korean companies were investing everywhere -- in England, U.S.,
Europe."

Today, not only has Asia recovered from the crisis, it has learned the
lessons of 1997.

"We have reconstructed much of the South Korean economy and the
exchange rate is being properly valuated rather than undervalued and
we possess a lot of foreign exchange reserve, which makes it less
possible for foreign speculators to confuse the market," says Yung-
Chul

Raden Pardede says, if another crisis comes, Indonesia is in a much
stronger position than in 1997. "We may see some crisis coming. We
don't know exactly when, any trigger from one country to another
country, contagion is of course inevitable in this globalization era.
But I think the magnitude will not be the same as what we have in
1997."

Asian governments continue to take measures to strengthen their
economies and, they hope, to prevent another crisis.