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Questions answered in this forum: Won't this have a negative impact on the U.S. economy? What signs will indicate improvement? Why does Singapore seem more stable? What is the IMF and how does it work? How would an Asian Monetary Fund affect economic and political dynamics? NewsHour Coverage November 26, 1997: Deputy Treasury Secretary Lawrence Summers discusses the summit. November 25, 1997: A discussion with the Deputy Prime Minister of Thailand. November 24, 1997: The APEC shows a grim economic forecast for Asia. November 21, 1997: An analyst and the president of the Philippines discuss Asia's economic state. October 28, 1997: The instability of Asian stocks causes worldwide fluctuations. October 23, 1997: The Hong Kong stock market drops 10 percent. November 25, 1996: APEC agrees to eliminate tariffs on computers and telecommunications equipment. November 21, 1996 A panel of experts discuss President Clinton's Asia-Pacific Tour. Browse the NewsHour's coverage of economy, Asia and business. OUTSIDE LINKS Japanese Economic Institute. APEC

W hen historians sit down to write the history of the 1990's, they may well focus on the economic crisis that continues to spread through Asia. In November 1997, Tokyo stocks went into free fall. A single-day five-percent decline was fueled by fears that the shut down of Japan's fourth-largest securities firm, Yamaichi, is a precursor of more bankruptcies. The dramatic moment was captured by television. Millions watched a rare display of emotion in the Japanese business world as the president of Yamaichi shed tears and plead for help for the 7,500 employees who are now jobless. On the streets of Tokyo, people are expressing fear for the stock market and banks. Many analysts warn that psychological distrust could spread from financial institutions to other areas of the economy such as the real estate and construction markets. Now, global investors are watching the Tokyo stock market carefully to see which way the tide will turn. Many of the ailing Asian countries looked at the booming Japanese economy since World War II as the triumph and a uniquely Asian model: a powerful combination of a vital flourishing market, a controlling government presence, and cultural virtues of hard work, collective enterprise and respect for authority. So what happened? According to some analysts, the trouble can be traced back to 1990 when the government turned to big banks to prop up weak companies. This formed what many called a "bubble economy" which was inflated by a system of keiretsu, in which corporate conglomerates help each other out in hard times. This meant corporations were dependent on each other to maintain their viability and when one sector of the economy weakened it impacted the others. There are other opinions. According to Malaysian Prime Minister Mahathir Mohammad, Asia's financial troubles stem from reckless currency speculation by Western investors. Our guests are two experts on Asian economics. Arthur Alexander is the president of the Japanese Economic Institute. In a recent NewsHour interview, Mr. Alexander described the situation this way: There have been severe problems of central control, insufficient amount of deregulation, unbalances in the economy, bad loans, cronyism, corruption. [Like] the Berlin Wall, There was rottenness in the Soviet system. The wall coming down was the symbolic end to that. And what we are seeing now I think is the symbolic end to many of these problems. Our second guest is Nariman Behravesh, chief international economist at Standard & Poor's DRI, an economic data analysis and consulting firm in Lexington, Massachusetts. In a NewsHour interview he described the situation in Asia this way: You've got serious problems in the banking sectors in these countries... the equities markets' bubble burst; you've got the property markets' bubble burst; you've got serious problems in the banking sector. It's almost reminiscent--this is just in Asia, of course--almost reminiscent of some of the problems he had in the Great Depression in the United States. So I would say it's fairly scary. Issues addressed in this forum include: How stable are the Asian markets? Will the Japanese see something similar to the Great Depression? What will the impact be on the U.S. economy? What does this say about the world economy's stability? Questions answered in this forum: Won't this have a negative impact on the U.S. economy? What signs will indicate improvement? Why does Singapore seem more stable? What is the IMF and how does it work? How would an Asian Monetary Fund affect economic and political dynamics?

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