Asian economies

"No one knows what kind of picture will emerge."
Lee Heung-mo, central Bank of (South) Korea, as the International Monetary Fund investigated South Korea's financial problems

International investors will be monitoring Asia's economies in 1998 after unmanageable debts, currency crises and corporate bankruptcies erupted in several countries, including South Korea, Thailand and Indonesia.

As banks toppled in 1997 under the weight of years of easy lending practices, former booming economies were forced to seek international intervention.

South Korea alone received some $55 billion in emergency loans brokered by the International Monetary Fund in the largest-ever such rescue plan. The World Bank, the Asian Development Bank and several countries promised help under the deal.

South Korea's trouble began as banks in the world's 11th largest economy began calling in short-term loans amid several corporate bankruptcies, including the carmaker Kia.

The IMF demanded increased government supervision, and in an unprecedented move, South Korea in December suspended several unhealthy banks.

The IMF also came to the aid of Thailand, with $17 billion in relief, and Indonesia with $40 billion. The deals involved several institutions and countries, with strict reforms attached and money being released as targets were met.

The region's problems began emerging in July as Thailand devalued its currency, the baht, putting pressure on neighboring currencies and stock markets.

As Hong Kong raised interest rates to defend its dollar from attack, its sizable stock market took several plunges that pulled down world markets in the autumn and raised international worries of a global impact.

In Japan, amid a wave of corporate failures, the oldest and fourth-largest brokerage house, Yamaichi Securities Co. Ltd., collapsed. It was the country's biggest business failure since World War II, and helped push the yen to a five-year low.