1
Solutions
The Asian financial crisis was ultimately solved by the International
Monetary Fund (IMF), which provided the loans necessary to stabilize
the troubled Asian economies. In late 1997, the organization had
committed more than $110 billion in short-term loans to Thailand,
Indonesia, and South Korea to help stabilize the economies.7 This was
more than double IMF's largest loan ever.
In exchange for the funding, the IMF required the countries to adhere to
strict conditions, including higher taxes, reduced public spending,
privatization of state-owned businesses, and higher interest rates
designed to cool the overheated economies. Some other restrictions
required countries to close illiquid financial institutions without concern
for jobs lost.8
By 1999, many of the countries the crisis affected showed signs of
recovery and resumed gross domestic product (GDP) growth. Many of
the countries saw their stock markets and currency valuations
dramatically reduced from pre-1997 levels, but the solutions imposed set
the stage for the re-emergence of Asia as a strong investment
destination.9
Lessons Learned for Viet Nam from the Asian Financial Crisis
1.First, Vietnam needs to create a stable political and economic
environment - this is considered an important condition to create a solid
basis for economic integration in the current trend.
2.Secondly, building a stable financial and monetary system with a solid
and healthy banking and financial system operating in unified and
flexible policies with local currency, market ... ... creating a healthy
competitive environment (among economic sectors) and active
integration into the world market for the most effective use of capital
and other factors of production.
3.Third, create a favorable environment to stimulate domestic and
foreign capital to actively invest.
4.Fourthly, to raise the level of science and technology, this is
considered a spearhead to break through the economy and enhance
competitiveness.
5.Fifth, pay special attention to key economic sectors for export - this is
one of the main drivers of growth.
6.Sixthly, for sustainable development, Vietnam needs to pay more
attention to the quality and efficiency of human factors; have social and
democratic policies, have long-term plans in building human resources
and creating a mechanism for talent to be used in the right place.
7.Finally, the administrative apparatus needs to be rapidly reformed
(defining responsibilities and authorities at all levels to decentralize
management) and creating a mechanism for talented and ethical people
to hold managerial positions. state management.