Imf Intervention Of Thailand : Imf Essay

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Written Assignment: Unit 2
IMF Intervention in Thailand
Clinton MacKillop
University of the People
Written Assignment: Unit 2
IMF Intervention in Thailand
Clinton MacKillop
Introduction
During the late 1990s, the world, especially Asia, faced economic crisis. In May, 1997, Thailand was hit especially hard. Due to multiple factors, foreign investors decided to pull their money out of the Thai economy causing the Thai government to eventually devalue their currency (Laplamwanit, 1999). This paper is not focused on what caused the crisis; rather, it examines the actions the International Monetary Fund (IMF) took in attempting to help Thailand recover from its disaster as well as the unfortunate consequences of doing so.
The Bailout The Thai government, unable to redirect the outward flow of money, was officially broke on July 2nd, 1997 (Jones, 1999). On August 5th, 1997, they accepted a $17 billion bailout from the IMF in exchange for allowing them to restructure their economy. Many Thai banks were suspended or closed, budgets were cut, and they were forced to significantly increase the interest they paid on foreign investments (Frontline, n.d.) (International Monetary Fund, 1999).
The Negative Outcomes While Thailand undeniably needed help, the efforts of the IMF only degraded the situation further. As Jefferey Garten stated in “The Chase”:
It wasn 't just to get their trade policy in order...but they immediately started to ask for wholesale restructuring of the
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