Japan and the United States in the Asian Financial Crisis Management
CHAPTER 8 Japan and the United States in the Asian Financial Crisis Management Not even the Asian countries, with their “miracle econo- mies,”could escape the µnancial turmoil of the twenty-µrst century.1 In 1997, Thailand, the Philippines, Malaysia, Indonesia, and Korea all experienced attacks on their currencies and stock markets, and their gov- ernments could not, on their own, manage these attacks or stabilize their economies. In response, the IMF, with the participation of Japan, the United States, and other governments, assembled international µnancial rescue packages in an effort to stabilize the international µnancial market. The com- bined total of aid committed through multilateral and bilateral channels reached more than $110 billion by the end of 1997. Japan’s involvement in the management of the Asian µnancial crisis2 presents a much more complex picture than its involvement in the series of Latin American crises analyzed in chapters 5 and 6. First, the Japanese gov- ernment’s actions and the style of leadership in managing the Asian crisis shifted over time from active and independent (early summer through fall 1997), to passive but cooperative (fall 1997 to mid-1998), to active with cau- tious independence (mid-1998 through 1999). Second, the Japanese govern- ment demonstrated ambivalence in cooperating with the United States and the IMF, by sometimes fully supporting their initiatives (e.g., in the second phase) and sometimes providing (or attempting to provide) alternative solu- tions to the crisis. This chapter analyzes the reasons for the variance in the Japanese government’s actions in Asian crisis management by applying the same theoretical framework as chapters 5 and 6: the importance of joint prod- uct and transnational linkages.
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