Viewing and reviewing the Thai economic crisis: Culture and context

Abstract

For many, the International Monetary Fund (IMF) is seen as an inconsiderate dictatorial institution forced upon the struggling emerging economies of this world, yet influenced by Washington! The 1997 economic crisis in Thailand, of which the key feature was the collapse of the Thai Baht on July 2nd 1997， is often argued to not only have been caused by the IMF through its extensive liberalisation conditions recommended in the 1980ร, but further exacerbated by a complex strategy of mismatched policies forced upon the Thai economy after the crisis itself. This research provides an in-depth analysis of the IMF-policy prescription process, to clarify why IMF-policies did not stimulate a quicker economic recovery in Thailand, and why in many cases the policies they prescribed in the aftermath of the crisis have-not come into fruition. This research also offers an understanding of the necessities required for efficient and effective post-crisis recoveries, on a larger scale, not simply in Thailand. Most controversially of all, this research explores the extent of governmental twisting and manipulation of prescribed policies as they infiltrate both the political and cultural economies, a key issue for global development agencies for future policy promotion. The Thai banking sector is used as an industry case-study to analyse how IMF policies were channelled to the grass roots of a sector, and how efficiently; demonstrating the complexities of this process: informational, cultural and political. Whilst this project focuses solely on the experience in Thailand, this research aims to illustrate the complexity of policy implementation, and demonstrate that barriers and constraints to policy execution arise in many different guises. This research does not, however, seek to offer a panacea for the execution of recovery policies for global institutions. From one perspective this research may suggest that in fact no such thing exists, as a key lesson to be learnt from any crisis experience is that the local specificities necessitate tailor-made solutions requiring acute attention to be paid to the local culture and the political system. Thus one of the main outcomes of this research is to demonstrate whether the problems of crisis recovery lie in the reform policies themselves, or their domestic implementation, based on the experiences of the Thai banking sector.