Lessons from the crisis: Dangers and opportunities in the Asian financial crisis

This study generates an overview of the 1997 Asian financial crisis, from its causes to the consequences. At the same time, it examines the context of the crisis, which includes the review of historical Asian development and the role of the International Monetary Fund (IMF) in the financial crisis. Particular attention is given to the crisis‘ impact on the local economy and people. In this it differs from existing research that analyses the impact on its own, this study links the crisis‘ impact to the foreign direct investment (FDI). The impact of the crisis, therefore, is reflected by examining the control power of the FDI money. It examines the crisis‘ impact through focusing on a unique angle of the two elements in the crisis – danger and opportunity. The results show that the social impact of the crisis put local people in danger of unemployment, underemployment, falling real wages and growing social inequality and lowered land and commodity prices, which dramatically reduced the cost of production. Accordingly, the control power of the FDI money increased extensively in the crisis, which represents the increasing danger of unfair exploitation of local labour and enclosure of land and resources which can be seen as opportunities beneficial to the international capitalists.