I - I. Regional Security, Energy, and The Environment What...

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I. Regional Security, Energy, and The Environment What are the major threats to peace in East Asia? Regional security - unpredictable nuclear power Energy - china's reliance on coal, north east Asian country dependency on oil The environment - population pressures, - one child policy air pollution, China 70% of energy is from coal. 300,000 premature deaths from respiratory problem. water pollution, - Over 600 million do not have access to clean water. environmental politics. - Environmental protection laws and regulations ignored by local governents. How have economic development and the pattern of energy consumption in East Asia contributed to environmental degradation? lots of usage of coal from china air pollution, and car derived pollution also problem. II. The Asian Financial Crisis What happened during the Asian Financial Crisis in 1997-1998? non-performing loans + low profitability collapse of several firms and banks lose of confidence by foreign investors. speculative attack defense by using foreign reserve failure makes currency to float freely depreciation of currency debt bomb exploded What are the possible explanations for why the crisis happened? Fundamentalist vs Panic stricken. Generally accepted idea - -economical explanation Liberalization of capital account, fixed exchange rate, and poor prudential supervision of banking system. Fixed exchange rate increases the economic benefits attainable from international trade and investment but this requires giving up the ability to adjust monetary policy to suit domestic economic condition, risking hole country. F - Government misusage of policy main problem. Crisis not due to liberalization, but governments' decision to liberalize less was problem. In fact, distruction of crony capitalism and close tie between politics and economy sector was a necessity for liberalization. P - Governments' policies are legitimized by the fact that these countries were making skyrocket progress in terms of growth, even including some crony capitalism and close ties between politics and economic sector being minor problem. The real problem is the external factors. hasty liberalization and attack from herd-like foreign
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investors including hedge fund are the main cause of the crisis. Even developmental state scholars agree to the fact that it is foreign investment that pulled the trigger for the crisis. It is apparent that financial liberalization carries substantial risks. Huge inflows of capital, much of it aimed at short term gains, are difficult for them to absorb prudently and efficiently, and when the capital suddenly retreats at signs of instability, the domestic economy is plunged into deep recession that sours even formerly solid loans and leaves domestic banks vulnerable to collapse. Why were some economies hit more severely than others?
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This note was uploaded on 02/14/2012 for the course PSCI 214 taught by Professor Wang during the Spring '11 term at UPenn.

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I - I. Regional Security, Energy, and The Environment What...

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