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ASIAN FINANCIAL CRISIS

The Asian financial crisis was seen by some as a failure of Asian economies due to poor domestic institutional structures, and it is still portrayed that way in some channels. But its quick succession by the Russian financial crisis, the Brazilian financial crisis, and the Argentine crisis dispelled that view for many leading scholars who viewed the crisis as a combination of institutional weaknesses, external shocks, and poor IMF intervention.

Like many crises, the Asian financial crisis was unexpected; first, in its arrival; and second, in its scale and scope. The Asian financial crisis that began in 1997 was both a banking and a currency crisis, essentially caused by large-scale short-term yen and dollar capital inflows into Thailand, Indonesia, South Korea, and Malaysia, and to a lesser extent into Singapore, the Philippines, and Hong Kong, coupled with fixed, overvalued exchange rates. Asset price bubbles were created in all of these countries as investment demand increased. The crisis was sparked by the floating of the Thai baht on July 2, 1997, followed through year-end by the floating of the Indonesian rupiah, the Korean won, the Malaysian ringgit, and the Philippines peso as the asset price bubbles burst. These events incited panic among international investors who, previously, had blithely poured capital into the region. Ultimately, IMF loans had to be extended to Indonesia, Korea, and Thailand.

How did the crisis come about? Initially, capital flows from abroad increased with the financial liberalization in each of these countries. Before liberalization, domestic and international capital controls imposed ceilings on domestic interest rates, limits on repatriation of foreign direct and portfolio investments, limitations to borrowing abroad, and restrictions on foreign investors for acquiring ownership of particular types of firms

(Desai 2003). Liberalization lifted these controls and resulted in current account convertibility of currencies. Financial liberalization allowed the Asian nations to increase leverage themselves using foreign debt.

In Indonesia, liberalization took place through a variety of banking reforms, resulting in a threefold increase in the number of private (rather than state-owned) banks between 1988 and 1996, making it difficult for the government to adequately supervise them (Haggard 2000). Foreign investors were allowed to invest in the stock market up to 49 percent of the ownership of listed stocks (Desai 2003). Foreign direct investment was allowed in additional sectors.

Thailand also underwent bank deregulation, beginning in 1989 with the removal of interest rate controls, as well as additional capital account liberalization with the initiation of the Bangkok International Banking Facility (BIBF) that allowed banks to borrow abroad and lend domestically. The goal of BIBF was to advance Bangkok as a regional financial center. This was undertaken during a period of political strife, which left little room to monitor the newly deregulated banking sector (Wade and Veneroso 1998). BIBF greatly expanded the access of Thai firms to foreign loans, accounting for two-thirds of the increase in external debt between 1992 and 1996 (Hanna 2000).

Malaysia’s financial sector was liberalized in the early 1990s, allowing foreign investors to buy shares in Malaysian corporations up to 30 percent. Controls on interest rates were removed in 1991; and in 1995, capital controls were liberalized. Banks lent aggressively to the real estate market. Malaysia wanted to transform Kuala Lumpur into Asia’s leading financial center (Desai 2003). Privatization took place not only for reasons of efficiency, but also for political reasons to increase bumiputra ownership of firms (Perkins and Woo 2000).

In South Korea, interest rates were decontrolled, and controls on foreign borrowing by domestic institutions, and on foreign investment in commercial and financial securities, were lifted. Chaebols, large business conglomerates, were to focus on core industries and in return were exempted from credit controls and barriers to investment and entry. The South Korean government also allowed investment and finance companies to become merchant banks in the mid-1990s, while the government continued liberalization of the capital account. Prudential regulations and supervision were not implemented.

The countries thus became more attractive to foreign investors, particularly as the growth phenomenon was overenthusiastically dubbed the “East Asian Miracle,” in which capital account and financial market liberalization could spark a growth frenzy. The World Bank (1993) made famous (now notorious) the moniker and characterized the “highperforming Asian economies” as operating in an environment of good macroeconomic management with limited fiscal deficits, increased saving and investment, growth of human capital, and export promotion policies. Growth rates ranged from 7 to 9 percent between 1991 and 1996 and there was very little inflation (Desai 2003). Government participation was viewed as “high-quality civil service” and judged to be impartial. Foreign borrowing was used for investment rather than consumption, and current account deficits were perceived as relatively low (Goldstein 1998). For these reasons, many investors, including privately managed mutual (retirement) funds, looked to East Asia as a relatively safe source of profit (Pempel 1999). Contrary views, such as that of Paul Krugman (1994), who questioned the sustainability of East Asian growth without real gains in efficiency, were scarcely heard amidst the investment mania. None of the Southeast Asian tigers remotely suspected that they would enter a financial crisis after such a glorious boom.

Japanese and European banks lent heavily to Southeast Asia. Japanese banks were able to borrow both domestically and abroad at low rates, and extend short-t erm loans to Southeast Asian banks and firms at higher rates, seeking aggressive returns (Wade 2001). Berg (1999) summarizes the lead-up to the crisis concisely:

The Asian crisis countries experienced tremendous capital inflows in the 1990s . . . Most of these capital inflows, and associated investment booms, were intermediated through weak domestic financial institutions that were often undercapitalized and poorly regulated. Long periods of macroeconomic stability and high growth led to complacency on the part of foreign creditor banks, borrowers, and the authorities. Liberalization of domestic financial markets was not accompanied by appropriate supervision and regulation of financial institutions . . . The combination of weak financial sectors with strong capital inflows and credit booms created two related but distinct sets of potential problems: potential inefficiency of the resulting investments, and financial fragility of an overleveraged corporate sector.

Short-term capital inflows into the region, including both portfolio flows into the stock market and other financial flows, grew so quickly that the task on the part of bank and non-bank financial institutions of monitoring the hundreds of new borrowers and projects put a severe strain on the risk assessment abilities of institutions from the start (Alba et al. 1999). There is evidence that firm-tevel weaknesses before the crisis contributed to the deterioration of the corporate sector (Claessens et al. 2000). What is more, leverage skyrocketed in Thailand, Korea, and Malaysia to 200 percent of GDP in 1997 (Hanna 2000). The level of bank credit as compared to GDP can be viewed in Figure 6.1.

Private credit by deposit money banks to GDP

Figure 6.1 Private credit by deposit money banks to GDP

Bank credit to GDP reached its pinnacle in all countries but South Korea, dropping off sharply thereafter. Much of the capital that flowed into Thailand and Indonesia went into the real estate sector. Ries (2000) writes that foreign investment was easy to spot in Bangkok, with the building of office complexes and luxury hotels, as well as high-end residences, apparent to all. The level of spending on construction greatly increased. The supply of available office buildings in Southeast Asia had increased greatly by 1996, and the size of the real estate sector was large compared to GDP (Quigley 2001). By 1995 an increasing amount of bank non-performing loans could be attributed to real estate loans.

But danger signs were not obvious to all investors. From previous experience with financial crises, such as those of the 1980s debt default crises, the Asian tigers were seen to be low risk since macroeconomic fundamentals such as inflation and budget deficits were low, while foreign exchange reserves were high (Wade and Veneroso 1998). Neftci (2002) discusses the overpricing of sovereign credits; for example, in October 1997, Korea was rated AA- by Standard & Poors, and downgraded to B+ six months later, a difference of nine steps. Asset overpricing led to an increase in risky positions, since potential financial vulnerabilities were not perceived. To make matters worse, country assets may have been overrated to begin with, but were later underrated after the start of the crisis. Ferri et al. (1999) show that the extent of sudden downgrading of crisis countries was unjustified by the fundamentals, exacerbating the difficulty countries faced in borrowing abroad and worsening the crisis situation.

One cause leading to the mispricing of risk was that the prior crisis models (“first” and “second generation” models) did not account for private debt. “First generation” models describe crises as the product of budget deficits (Krugman 1979), while “second generation” models describe crises as a conflict between supporting a fixed exchange rate while attempting to expand monetary policy (Obstfeld 1994). Therefore, the type of crisis that occurred was not even on the radar.

Looking back, there were warning signs that a reversal was in the works. The currencies were all fixed or, as Tobin (1998) dubs them, “adjustable pegs.” In 1996, the appreciation of the US dollar and, therefore, Asian currencies, led to a decline in export growth in Thailand and Korea.1 This put pressure on the Asian currencies and began to worry investors. Fixed currencies presented a large, unforeseen vulnerability since domestic currencies had what was seen as an implicit guarantee of stable convertibility. This was easy to achieve before the crisis, when the countries were flush with foreign currency, despite the fact that there was a gradual real exchange rate appreciation for the export-oriented economies and increasing current account imbalances (Goldstein 1998). Export growth declined as cost competitiveness was eroded due to the increase in prices of non-traded goods and services, such as property, and to the appreciation of the dollar against the yen (Hussain and Radelet 2000). This contributed to the appreciation of the real exchange rate. But a fixed exchange rate was difficult or impossible to maintain post-crisis, when foreign currency suddenly exited the region. The cyclical correlation between each country’s economies created regional multiplier effects that amplified the difficulties (Wade 2001). Figure 6.2 illustrates the sharp decline in the real effective exchange rate that took place between 1997 and 1998.

In addition, over time, residential real estate prices in Thailand, Indonesia, and Malaysia began to fall, indicating that the real estate bubble in these countries was beginning to burst (Berg 1999). In Thailand and Indonesia, the percentage of bank loans that went to real estate was more than 18 percent, and by 1996 the vacancy rates were around 14 percent (Alba et al. 1999). The percentage of profits going to pay interest expenses had increased to between 30 percent in Indonesia, Malaysia, and the Philippines, and 85 percent in Korea.

BIS real effective exchange rate

Figure 6.2 BIS real effective exchange rate

In January 1997, Hanbo, a South Korean chaebol, declared bankruptcy; while Somprasong Land, a Thai company, became delinquent on foreign debt in February. Sammi Steel and Kia Motors, South Korean companies, then failed. The central banks of Malaysia and Thailand limited lending with exposure to the stock and real estate sectors, respectively.

Indonesia’s growth reversal of 18 percent was dramatic (Radelet and Woo 2000). The stock market and bank lending had remained strong until mid-1997, when they suddenly reversed. As the outflow of foreign exchange in Southeast Asia increased, both Thailand and Korea made great attempts to defend their currency pegs (Berg 1999), but the attempts were soon thwarted. Thailand was whipped into a frenzy by the threat of devaluation, and went through four Finance Ministers in the 14 months before the baht was floated (Ries 2000). In May 1997, the Thai baht underwent a speculative attack, and its defense caused the depletion of reserves. The central bank suspended operations of 16 finance companies and tightened currency controls to stabilize the baht, but two days after signaling that the baht would not be devalued, the currency was forced to float. After this day on July 2, 1997, when Thailand devalued its currency, other countries in the region felt the pressure to devalue or face a speculative attack on their own currencies. Thailand, Korea, and Indonesia were most strongly affected by the crisis.

The currency crises experienced by the Southeast Asian “Miracle” countries were tantamount to “runs” on both the currencies and on the banks. Thus fixed exchange rates posed a threat to financial stability in the region from the start. In hindsight, this is clear; for future reference, as several leading economists have noted, exchange rate overvaluation has been among the best early-warning indicators of crises (Kaminsky and Reinhart 1999; Reinhart et al. 2000). Not to be ignored, too, was that the real economy in Southeast Asia was facing challenges in terms of exports starting in 1996, and increasing competition from China (Goldstein 1998).

Initial IMF support packages were insufficient to cover debt service, leaving countries to convince some investors to roll over their debt (Berg 1999). Agreement by some foreign creditors to roll over short-term debt in Korea into medium-term debt helped the situation somewhat. Thailand, Korea, and Indonesia closed down insolvent institutions, and created specific institutions to take over, manage, and strengthen the banking system. Fiscal discipline had been exercised in all countries but the Philippines until the crisis hit; after the crisis began, fiscal policy was initially contractionary as funds were reserved for private sector firms. The IMF itself recommended fiscal stringency in the crisis, and this quite arguably worsened the crisis. Monetary policy was tightened to prevent the cycle of currency depreciation from spiraling into inflation and further depreciation.

It became clear that moral hazard had been a problem in these countries in the build-up to the crisis, although downplayed during the “Miracle” period. Politicians were closely connected to financial institutions and/ or firms in these countries, and there was an underlying assumption that financial institutions would be bailed out if they got into trouble. For example, Thailand’s central bank spent 53.7 billion baht on bailing out troubled institutions and 62.4 billion baht on bailing out holders of commercial paper issued by finance companies (Ries 2000). In Indonesia, the Suharto family owned major shares in 1247 companies. Indonesia’s interest in stabilizing its economy was seen as motivated by the Suharto family’s interest in preserving its fortune, and attempts by the Finance Minister to close down insolvent banks resulted in his prosecution (Ries 2000). And in Korea, close ties between the government, banks, and chaebols resulted in bad, presumably guaranteed, loans to the chaebols (Ries 2000).2

Moral hazard is viewed as playing a role in creating the crisis, but is not the whole explanation. In general, liberalization and fixed currencies, paired with poor regulatory and institutional environments, made control of capital inflows much more difficult. The extent to which institutional interrelatedness exacerbated or initiated the crisis has been a matter of vigorous debate. Some leading economists, including Alan Greenspan, Chairman of the US Federal Reserve; Larry Summers, Deputy Secretary of the US Treasury Department; and Michel Camdessus, Managing Director of the IMF, attacked the c ountries for engaging in “crony capitalism,” and maintaining ties between government, finance, and business (Sundaram 2007; Corsetti et al. 1998), while other economists have pointed out that these types of relationships had been ongoing, even during decades of growth and stability (e.g., Tobin 1998; Chang 2000), and that they were often beneficial to growth (Wade and Veneroso 1998), or at least not the underlying cause of the crisis (Singh 2002).

In the aftermath of the crisis, poorly performing institutions often did little to alleviate the economic suffering. Suharto’s government in Indonesia used IMF funds for pet projects, and Suharto was replaced after the May Revolution resulted in bloody protests and rioting throughout Jakarta (Ries 2000). The economic outcome of the crisis varied greatly depending on the strength of the bank regulatory system, even though most Southeast Asian countries had some type of asset price bubble in the 1990s (Collyns and Senhadji 2002) and may or may not have suffered from “crony capitalism.”

Countries suffered most when and where they were weak (Collyns and Senhadji 2002). Because Malaysia had better regulated and capitalized institutions, the economy fared better than those of Thailand, which experienced sharp losses on loans in the relatively unregulated financial sector, and Indonesia and Korea, which had allowed highly leveraged firms to obtain dollar-denominated loans. Korea in particular had very high levels of corporate debt, with a corporate debt to GDP ratio up to 50 percent higher than that of the US (Wade and Veneroso 1998). This created a greater vulnerability to interest and exchange rate shocks. The Asian financial crisis itself also increased financing costs for firms. Asian firms with a 10 percent rise in leverage experienced a 1.41 percent increase in the credit spread for corporate bonds during the Asian financial crisis (Mizen and Tsoukas 2012). Korea was also affected strongly since exports were concentrated in a few main sectors, and prices of exports fell (Hong and Lee 2000). High interest rates, part of the IMF adjustment program, aggravated the indebtedness of firms.

Drilling down to an even lower level than the banking industry, the quality of individual investments was relatively poor. Much of the investment went to speculative activities, industries already burdened with over?capacity, and inefficient government projects and monopolies (Goldstein 1998).

The breakdown of the banking sector occurred as follows: the deterioration of bank balance sheets before the crisis, due to excessive lending and low capital returns, coupled with the assumption that governments would back lending institutions, created an environment ripe for banking crisis (Haggard 2000). Lending rose rapidly as GDP grew slowly. As the currency crisis ensued and the currency was devalued, banks’ balance sheets deteriorated. A simultaneous deterioration in firms’ balance sheets also led them to take on greater financial risk since they had less to lose if bank loans fail (Mishkin 1999). Financial firms that had poor capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk (CAMELS) were more likely to be distressed or closed, although large institutions were less likely to be allowed to fail (Bongini et al. 2001). The banking crisis in turn exacerbated the currency crisis, and a vicious downward spiral ensued (Kaminsky and Reinhart 1999).

Krugman’s (1999) “third generation” crisis model exemplified some of these features, including the role of firms’ balance sheets in determining their ability to invest, and the role of capital flows in affecting the real exchange rate. Krugman de-emphasized the role of banks3 or moral hazard as primary causes of the crisis and the important role of balance sheet difficulties in constraining investment, underscored by a deterioration in the real exchange rate. A loss of confidence created a downward spiral by putting pressure on the exchange rate, leading to a real depreciation that worsened balance sheets of firms, spreading the loss of confidence.4

The interconnectedness of these Asian economies, and the speed at which cross-national capital movements operated, also served to amplify the crisis (Pempel 1999). Contagion between the financial markets of Thailand, Malaysia, Indonesia, Korea, and the Philippines was evident in currency and sovereign spreads (Baig and Goldfajn 1999). By contrast, China, which had capital account controls and trade restrictions at the time, weathered the crisis well. The contagion aspect of the Asian crisis was confirmed by Baig and Goldfajn (1999), who find a significant increase in correlation between currency and equity markets in Thailand, Korea, Malaysia, and the Philippines during the crisis, after controlling for own- country effects. Contagion was also verified by Kaminsky and Schmukler (1999), who found that daily changes in stock prices between 1997 and 1998 in Hong Kong, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan, and Thailand were due to local and neighboring- country news regarding, in particular, international organizations and credit rating agencies. Relatively inconsequential news also carried weight as herd behavior took over. This climate of fear overtook the region.

The yen carry trade, in which US and European banks borrowed yen and lent funds throughout Asia, contributed to the volume of short-term capital inflows into East Asia. By mid-1997, Japanese funds comprised more than one-third of total outstanding commercial debt in the Association of Southeast Asian Nations (ASEAN) countries (Pempel 1999). Japan’s economy was, at the same time, continuing to suffer from the crisis that began earlier in the decade.

Adverse real impacts on each economy ensued. Living standards fell, unemployment rose, and import prices increased. The poor within these developing countries, who were already vulnerable to small changes in the business cycle, fell into even more crushing poverty, and the middle class felt robbed of their savings and financial security (Wade and Veneroso 1998). In some areas, the recession was the worst since World War II (Berg 1999). Social conditions also deteriorated. The region, which had experienced a large amount of poverty reduction two decades before the crisis hit, underwent declines in social services such as health and education, increasing unemployment, and increasing psychological stress and crime. Pre-crisis vulnerabilities, such as poverty and inequality, lack of labor rights, and household insecurity became serious problems after the crisis hit (Atinc and Walton 1998).

The resolution of the crisis at the policy making level was grueling. Indonesia faced political and economic volatility, with dissension between the IMF and government about appropriate recovery-oriented policies. President Suharto was reviled due to his inability to stem the crisis, and protests against his administration began in May 1998. Suharto resigned and his successor, B.J. Habibie, attempted to gain credibility. Policy making independence was granted to Bank Indonesia (Desai 2003). Indonesia also established the Indonesian Bank Restructuring Agency (IBRA) in 1998 to recover liquidity credits that Bank Indonesia had lent to ailing banks (Radelet and Woo 2000). The government closed 38 domestic private banks, nationalized seven domestic banks, and recapitalized nine banks, and banks were to repay all overdue trade credits. Bank closures in Indonesia, required by the IMF, caused bank runs and nearly dissolved the entire banking sector (Djiwandono 2007). Due to political uncertainty, Indonesia’s recovery was long in coming.

Korea’s economy was affected by the inadequacy of the IMF rescue packages and by massive debt owed by the private sector to foreign banks (Desai 2003). The $57 billion IMF rescue package failed to restore confidence, and the economic turmoil faced by chaebols such as Halla and Coryo Investment & Securities worsened the country rating. Debt restructuring was essential. Korea set out to reduce non-performing loans, which by March 1999 amounted to 143.9 trillion won (Hong and Lee 2000). The

Korea Asset Management Company (KAMC), used to purchase nonperforming loans, was supported by the government through bond issues. Korean recovery arrived quickly thereafter, mainly due to expansionary monetary and fiscal policy.

IMF-i nduced structural reforms in Korea led to mass lay-offs in the Korean automobile industries, which brought about strikes and riots (Weisbrot 2007). Financial reforms culled by the IMF also failed to account for the close relationship between banks, corporations, and governments and the systemic character of the banking crisis. The IMF was later called out for implementing these policies along with promoting tight fiscal policy stances particularly at the outset of the crisis.

As an immediate response to the crisis, Malaysia tightened monetary and fiscal policy. Malaysia implemented capital controls in September 1998, fixed the exchange rate, reduced interest rates, and later expanded fiscal policy. Current account transactions were regulated such that imports must be paid for in foreign exchange, and export earnings must be brought back within six months and converted to local currencies. The movement of FDI was also temporarily limited.

Thailand faced problems with non-performing loans through 1999, and the government introduced a voluntary debt restructuring program and implemented fiscal stimulus programs in attempts to repair the financial and real economic damage (Flatters 2000). Fiscal stimulus programs throughout East Asia reflected a change in IMF stance toward fiscal deficits.

The Philippines were somewhat better able to weather the crisis since the country had completed an IMF-supported program of macroeconomic adjustment and structural reform in the late 1980s and early 1990s. Monetary policy was tightened and the banking system was strengthened just after the crisis hit. Monetary and fiscal policy was relaxed in mid-1998.

The countries gradually recovered through 1999 and 2000, even as investment ratios and stock market prices fell (Barro 2001). On the whole, when the panic ended, the exchange rates and interest rates recovered, and banking sector repair ensued (Sachs and Woo 2000). Economic recovery was V-shaped, due to countercyclical fiscal measures and recovery, particularly in Malaysia and South Korea, in the electronics sector in anticipation of Y2K (Sundaram 2007). A good portion of banks in Indonesia, Thailand, and Korea were closed, merged, or nationalized. The main remaining problem left over from the crisis was the large amount of nonperforming loans remaining on the books of financial institutions.

The lender of last resort, the IMF, has been blamed for worsening the crisis. IMF policies tied to loans to the beleaguered nations resembled to some extent failed policies employed by President Hoover during the

Great Depression. Radelet and Sachs (1998) detail the policies that exacerbated the crisis, noting that IMF requirements to close banks, enforce capital adequacy requirements, and tighten credit greatly worsened the banking panics in the region. Other destructive measures included IMF requirements to tighten fiscal spending, impose structural changes on the non-financial sector, and increase central bank discount rates.

The IMF program for Korea went beyond measures needed to resolve the crisis, calling for structural and institutional reform, and, destructively, called for even wider opening of Korea’s capital and current accounts (Wade and Veneroso 1998). IMF programs for other countries required similar institutional reforms and capital account liberalization. Kissinger (1998) emphasizes the importance of reevaluating the IMF rescue program package, particularly since, “as the chief economist of the Deutsche Bank in Tokyo pointed out, the IMF acts like a doctor specializing in measles and tries to cure every illness with one remedy.”

It was proposed that a market-driven reward and punishment system would create financial stability. In response to this, the IMF produced Reports on the Observance of Standards and Codes and launched a Financial Sector Assessment Program, which were to help provide information on economic situations. These measures were unsuccessful in providing external stability, and amounted to a list of structural issues rather than a true monitoring system (Wade 2007). The crisis led to many suggestions to remake the international financial architecture to prevent another meltdown. These suggestions are discussed in the final chapter.

For some time during and after, many top officials in Western nations perceived the Asian crisis as fundamentally rooted in the structure of those economies themselves. Singh (2002) makes the case that this is not so, since Asian economies, under government intervention, had been growing rapidly since 1980, while financial liberalization, the source of asset price bubbles that led to the crisis, was more recent. After the US crisis of 2008, these beliefs have been revised, as both developing and developed nations found themselves in peril.

The crisis led to a number of institutional reforms at the international and regional levels, including creation of the Group of Twenty (G-20), the Financial Stability Forum, the IMF/World Bank Financial Sector Assessment Program, and the Chiang-Mai Initiative for currency swaps (Takagi 2007). The G-20 is a group of finance ministers and central bank governors from 20 countries. Two financial surveillance institutions include the Financial Stability Forum, which is a group of major national financial bodies that promote international financial stability, managed by the Bank for International Settlements; and the IMF/World Bank

Financial Sector Assessment Program, which provides in-depth analysis of countries’ financial sectors.

Other institutions were left unchanged, including the IMF, credit rating agencies, and hedge funds (Prakash 2001). The IMF remained unaccountable to stakeholders who are forced to implement liberalization and privatization policies. Ratings agencies continued to rate in a procyclical fashion, while hedge funds continued to engage in excessively risky activity which influenced the financial industry.

The Asian financial crisis led to a general crisis of confidence in the region after the economies returned to normal rates of growth. Institutions were founded in the region to improve corporate governance and fight corruption, which sent positive messages to investors, but investment, needless to say, has not returned to pre-crisis levels.

 
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