APEC & Thailand   Term Paper ID:27308 Click to get this paper

Essay Subject: Reviews the events of the year 1997 that led to the meltdown in the Thai economy. Discusses the attempts by the regional leaders at the Asian Pacific Economic Cooperaton (APEC) to contain the situation in the fall of 97.... More...

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Paper Abstract: Reviews the events of the year 1997 that led to the meltdown in the Thai economy. Discusses the attempts by the regional leaders at the Asian Pacific Economic Cooperaton (APEC) to contain the situation in the fall of 97. Paper Introduction: APEC and Thailand Introduction With the recent serious economic problems in Asia, the APEC Conference held in Vancouver, Canada this week has become more important, and more visible. The intent of this analysis is to explore the impact of APEC on Thailand and the issues of concern to Thailand. History APEC, or the Asia-Pacific Economic Cooperation, was founded in 1989. At that time, it had only 12 members, but it has ended expanded to 18 members, including Hong Kong and the United States. The pact was formed to promote economic cooperation in the region, and in relationship to the United States. It has generally Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Much ado: APEC. At that point, the currency lost16% of its value. (1997B, November 26). The Wall Street Journal, A11. (1997, November 25). The goal for APEC members is to gradually eliminate tariffs andtrade barriers over the next few years (Connelly, 1997). The Wall Street Journal, A24. However, Congress was unwilling to grant thatconcession to Clinton and he was unable push toward his ideas for improvedfree trade arrangements in the region. Another major accomplishment of the conference - although the detailshad been worked out earlier - was endorsement of many of the features ofthe Manila plan that had been put together during the preceding week. There were several other issues of importance, although not all wereresolved during these few days. Calmes noted that the Manila plan was actually created by thecountries' finance ministers before the conference, and that there was someindication that free trade might actually be a casualty of the economicdownturn in the region. In the area of banking, there were two main emphases. Many of the protesters were there to protest humanrights abuses throughout the region. President Clinton raised the APECconference to full summit status in 1993.Thailand's Recent Crisis The Asian miracle started to become an Asian crisis during the earlypart of this year. Others criticized the emphasis onfree trade and expansion, which they contend is at the expense of thepeople of the various Asian countries. The Economist, 341(7993), 36-38. In Thailand, for example, thereis considerable corruption and family ties often are the foundation forbusiness deals. Essentially, the problem started whenforeign investors began to lose confidence in Thailand. Thailand was forced to ask forhelp, receiving a bailout plan from the IMF, but being denied additionalfunds from the United States, at least earlier this year.Recent Accomplishments In the conference that just ended last week, there were a number ofobjectives established, although the participants did not accomplisheverything that had been expected. Another problem, pointed out by Wall Street Journal writer JackieCalmes (1997) is that APEC itself might cease to be relevant as a majorsummit. Sheindicated that APEC actually promoted the oppression of workers andindigenous peoples by encouraging the creation of sweatshops and otherexploitative ventures. (1997, November 26).Asia's financial shock. These nine product categoriesincluded such things as chemical, forest products, and telecommunicationsequipment. Connelly, J. Thisplan was designed to work in tandem with the IMF bail-out plan in order toassist the countries to recover from the recent economic downturns. In the short term, countries such as Japan and the United States mightprovide financial help, and fiscal support, for Thailand and the othertroubled countries, but in the long-term, the United States is demandingchanges in the way the economies operate. Nonetheless, it is at least an indication that thedesire for cooperation still exists, and that countries are not turningagainst each other in an adversarial manner.Critiques There were not only delegates at the recent APEC conference, therewere also protesters. Seattle Post-Intelligencer, A1+. (1997). The keynote of the conference, however, was support for the Manilaplan and an emphasis on the role of the IMF in the region's financialrecovery. Also a problem was the fact that the United States was not part of theoriginal bailout effort from the IMF. The APEC countries did agree to monitor each other's economies andoffer suggestions for reform efforts, although this is more in the natureof a verbal agreement than a concrete and specific agreement with explicitmechanisms in effect. It also raised interest rates (Sapsford,McDermott and Williams, 1997). Inaddition, the group talked about creating a regional fund that wouldprovide bailout loans to Asian countries in lieu of the IMF, in case ofdifficulties with that entity. On July 2, the central bank stopped supporting thebaht because its reserves were depleted. This did not work, however, and the efforts to restore the currencyand some stability failed, followed by a major crash in the stock marketand in land values. It has generally supported free trade efforts and theexpansion of trade, although critics indicate it has been overly fond ofrhetoric and less interested in hammering out action plans and concreteagreements (Much ado: APEC, 1996). (1997, November 24). Calmes, J. The pact was formedto promote economic cooperation in the region, and in relationship to theUnited States. In other words, it is not clear how well theagreements reached at the recent conference will be implemented. The currency rate changed from 25 baht per dollar inJune of 1997 to approximately 4 baht per dollar by November of this year(Sapsford, McDermott, and Williams, 1997). (1997B, November 25). Seattle Post-Intelligencer, A1+. APEC Conference. They startedpulling money out of the country which created a panic in which foreigninvestors and Thai companies began converting their bahts to dollars. IMF Asia bailout gets APEC'sbacking. The APEC Business Advisory Council was made up of three private-sectorrepresentatives from each of the 18 nations. TheThai central bank responded by buying up baht with its dollar reserves,trying to prop up the currency. References Barlow, M. This group was emphatic aboutthe necessity of free trade efforts continuing, despite recent problems.The CEOs indicated that political leaders seemed to be supportive of theeffort, and that the business leaders had been reassured at the conferencethat the political leaders had the will and ability to take decisive actionto restore confidence and move toward recovery (Connelly, 1997B). Free trade meets the tiger: Canada's deadly role inAPEC. In addition, one of the major accomplishments that President Clintonwanted to bring to the table at this conference was permission fromCongress to engage in fast-track trade negotiations with the Asiancountries, similar to NAFTA. And Williams, M. The participants sought to make it easier for the IMF to lendmoney to countries to deal with short-term currency crises, thus avoidingmore serious problems. Thailand was resentful of the factthat the United States did not provide the support desired in that effort,although now there is a supplemental package supported by the Congress.This might interfere with free trade efforts and cause a rift between theUnited States and some of its Asian partners. This is potentially an important effort forThailand and other countries, although after-the-fact in the currentsituation (Calmes, 1997B). Calmes, J. In general, the countries have agreed toseek more transparency in the region's financial systems, for example,working together to make financial transactions between countries easier. President Clinton was one of the keynotes of thegathering, because of the important role that the United States is expectedto play in the economic recovery in the region. Connelly, J. (1996). APEC: Asian economies causeconcern. The Wall Street Journal, A3, A12. For example, Maude Barlow (1997)noted that APEC is almost exclusively geared toward increasing economicactivity, with little regard to human rights or worker rights. The Canadian Forum, 75(856), 9. In another movedesigned to help out the flow of business, the business advisors sought tohave greater cooperation between the countries' central banks instituted(Connelly, 1997B). The intent of this analysis is to explore the impact of APEC onThailand and the issues of concern to Thailand.History APEC, or the Asia-Pacific Economic Cooperation, was founded in 1989.At that time, it had only 12 members, but it has ended expanded to 18members, including Hong Kong and the United States. One of the major agreements to impact Thailand was the agreement onmaking another major move toward the APEC free trade goal by selecting ninepriority product areas to work within. The United States, and the IMF, are likely to demandchanges in operation and certain reforms for their financial support. There were actually a number ofdifferent conferences occurring at the same time, including the gatheringof political leaders, a summit of business leaders, an alternative summitdiscussing human rights issues, and a series of bilateral meetings betweendifferent participants. In Thailand, problems began in February and escalatedthrough the middle of the year. It isalso instructive that the leaders did not support all the proposals oftheir own business advisors, nor of President Clinton. In general, Clinton had verylittle to offer to the other members of APEC, far different from U.S.relationships with Canada and Mexico, or its bailout of Mexico. Downturn in Asia unsettles leadersat APEC summit. Thiswas directly relevant to Thailand, adding to its package from the IMF. Sapsford, J., McDermott, D. First, businessleaders sought to have banking regulations tightened so that currencyspeculators would have more difficulty in operating. APEC and ThailandIntroduction With the recent serious economic problems in Asia, the APEC Conferenceheld in Vancouver, Canada this week has become more important, and morevisible. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.