Three major themes dominated this past year: the financial crisis that paralyzed much of the region, leadership changes that affected a third of the world's population, and a series of painful reminders of how far some East Asian nations still have to go in guaranteeing the basic freedoms that most in the Western world take for granted.
Asia's financial crisis affected countries in one of three different ways: bad, worse, and "what crisis?" Japan had it bad, suffering its worst recession and highest unemployment since its reconstruction after World War II. Further, it took most of the political heat, since the world expected Japan to continue to be the "locomotive" driving East Asia's economies. South Korea also had it bad, with a US$55 million IMF bailout needed to jumpstart the ailing economy that had quickly become the region's second richest. The Korean people, who had recently seen their per capita GNP rise above US$20,000, had to struggle and make some hard decisions to maintain that status.
Southeast Asia had it worse, though, as the heaviest economic burden fell upon the nations that could least afford it. The currency collapse that started in Thailand in 1997 (not because of, but not despite, George Soros' currency dealings) quickly spread throughout Southeast Asia. Especially affected were Malaysia, which had to postpone its plans for an "Asian Silicon Valley" mega-project, and Indonesia, where the currency collapse was so severe that rioting citizens forced Suharto out of his 30 year rule. Over one hundred million Indonesians are now making less than one dollar a day, not enough to live on even in Indonesia's depressed economy.
China and Taiwan, for their part, were largely left asking "what crisis?" While every other economy in Asia is projected to have a negative GDP growth for 1999, Taiwan is projected to have a growth of 5%, and China has been chugging along steadily at nearly 8%. As Theodore Friend, Senior Fellow at the Foreign Policy Research Institute, points out, other Taiwanese data are also strong, including high foreign exchange reserves, low foreign debts, a strong debt to equity ratio, and the lowest percentage of non-performing loans in the area. Taiwan has become a leader in high-technology manufacturing, creating computer chips that power many of the world's computers (under American brand names).
