Vinod K. Aggarwal
Private Capital Flows in the Age of Globalization: The Aftermath of the Asian Crisis, 2000
The Asian crisis has once again raised the issue of how relations between lenders and debtors might be better managed to prevent the recurrence of such problems. In considering alternative schemes to reform international institutions, regulate financial intermediaries, improve debtor policies, and the like, scholars and policymakers have looked to the historical record to see how problems have been handled in other situations. Yet few have examined the lessons that the Latin American debt crises offer to Southeast Asia. In fact, some are skeptical about learning from earlier crises. For example, Joseph Stiglitz has recently argued that “models about crises that developed in response to the Latin American debt crisis in the 1980s are completely inadequate for understanding the causes or solutions of the East Asian crisis.”1 The most recent case of massive financial intervention prior to the current Asian problems was the Mexican peso crisis of 1994-5. And before this recent crisis, the debt workouts beginning in 1982 may provide lessons from the past.