WI: No 1997 Asian Financial Crisis?
- Thread starter Justin Pickard
- Start date
Max Sinister
Banned
The speculation bubble in Japan had gone too far. Of course, if the investors seriously believe, that the prices for ground can still rise, or stay on a high level, although that level means that the Imperial Palace is more worth than all of California, it's OK, but how long can that go on? You may decide to cool down the boom earlier.
It'd probably delay the Russian government's default on its international debts in 1998, at least for a little while. Of course, a collapse would be pretty much inevitable, as the Russian economy was managed far, far worse than even Japan's. Moscow would probably still be able to pry loans out of the IMF for a few years more, and there's a pretty good chance that Putin would stay as another faceless government bureaucrat.
Going to continue it? You know. Please? I was actually thinking about your timeline the other day because my still in the planning stages is going to have a Japan that manages the bubble better.
You're thinking of the collapse of the Bubble (as is Darkest, actually), not the Asian Tiger 1997 melt-down. At one point in the Bubble (and hence a few years before this crisis) the land value of Tokyo was equal to the land value of the continental United States. Crazy.
Hmm. Problem is that an adjustment was both needed and inevitable. Think of the 1992 ERM/UK currency speculation crisis. Nerve wracking for the UK but it was beneficial in the long term.
On the other hand the magnitude of the '97 crisis was huge and the IMF didn't help matters (I'm a classical liberal and I think those structural adjustment programs are garbage).
I think the main option would be a managed transition. Maybe one country in the region collapses on a smaller scale. Thailand, probably. Japan/Hong Kong/Singapore bails them out as they see worrying tendencies for expansion? Maybe Indonesia starts to go under?
The consequences of a smaller crisis and substantial restructuring are good. Japan remains a preferred destination for investment (I, for one, prefer not to prop up the PRC) and retains more of it's relative economic weight. Perhaps OTL China manufacturing goes to Taiwan/South Korea and maybe other Asian countries instead of China.
The countries of the region are way better off in per capita GDP, real GDP, actual employment, actual on-the-ground conditions, and so forth.
A higher price of oil keep the Russian economy from crisis in 1998 and maybe they don't keep trending towards dictatorship as IOTL.
The developing world sees quite a bit more investment then they IOTL after the crisis.
A smaller backlash against the IMF/World Bank (which is not actually a positive given those organizations track records in the developing world).
A more stable Indonesia, but possibly one that doesn't try out actual democracy.
Probably other stuff that I'm too tired to think of
Nope - the Japanese economy had been stagnating throughout the 1990s with little overseas investment.