| Thailand's economy has always been an | | | | investors pulling out their overseas investments |
| export-driven economy and existed as a | | | | from the market, the volatile and corrupt political |
| decentralized free enterprise. All the Thai | | | | situation of the country added to this crisis. IMF |
| governments have favored an open investment | | | | had to approve a package of around 20 billion |
| pattern, emphasizing on creating a favorable | | | | dollars in order to rescue the Thai economy. |
| market for attracting huge foreign direct | | | | Until 1997, South Asian countries Thailand, South |
| investments. In the early 1980s and during 1990s, | | | | Korea, Malaysia, Philippines, Indonesia and |
| Thai economy was one of the fastest growing | | | | Singapore were considered the most favorable |
| economies in the world recording an average | | | | markets for foreign investment due to high |
| growth rate of 9 percent all this crashed during | | | | growth rate and heavy returns. Due to certain |
| the July 1997 Asia economic crash. | | | | political developments in the west, investors |
| Thailand's economy was the worst hit during the | | | | started removing their investments from the |
| crisis, dropping by a whopping 75 percent. Until | | | | market. This created a domino effect and |
| July 2, 1997, the baht enjoyed a value of 25 | | | | triggered the economic collapse. There are certain |
| against the US dollar. But due to the crisis, the | | | | other factors that have contributed to the crash. |
| baht to dollar rate suddenly dipped to half of its | | | | Rise in the interest rates in US markets, dropping |
| current value. Several major finance companies | | | | of export growth, and an open and liberal market |
| including the Finance One were unable to sustain | | | | policy resulted in a loss of confidence in the East |
| this crisis and collapsed. With several foreign | | | | Asian markets. |