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early 1990s, but it was still quite high at more than 8 percent per annum. A sign of trouble emerged in the second half of 1996 when export growth unexpectedly fell to zero percent, and in early 1997, Thailand experienced economic instability for the first time in a decade. Following Thailand, Indonesia and South Korea were fallen down in late 1997, due to the capital account deficit and term imbalance caused by borrowing on a short-term basis for long-term purposes. Table 4.5 shows the urgent situations of financial crisis.

Although such East and Southeast Asian countries as Japan, Singapore, Hong Kong, and Taiwan have been excluded from the financial crisis, Japan has been experiencing many difficulties from the shackle of so-called bubble economy around that time, and the rest of the countries just mentioned also should have pains from the economic recession influenced by the Asian financial crisis. But it should be born in mind that the vulnerability of financial system was not the only cause of the Asian crisis. As was indicated by Paul Krugman (1994), East Asian countries exploded partly because of the lack of structural transformation that the West had carried through.

To sum up, the 1990s proved to be quite a roller coaster ride for Asians, who went from the anticipated boom of a glorious “Pacific Century” to the actual bust of a devastating region-wide financial crisis. But whereas the analysis during the glory days of Asian Tigers and Flying Geese has gone out of the way, the current intermittence is probably as good a time for reflection as those wounded by the financial crisis.

4.3 Counter Measures after the Financial Crisis
Japan, South Korea and other advanced and middle-level developing countries in Southeast Asia were obliged to execute the structural adjustment program. Especially, South Korea was helped by the IMF in stabilizing the value of it's currency to overcome the financial crisis. Structural adjustment was the unavoidable request of the New Times.

What seemed most urgent for those Asian countries was the market oriented structural reform of the banking system. Before the crisis, banking systems of the Asian countries had, more or less, the characteristics of ordinary government's intervention and the discretionary enforcement of prudential rules. But the unfortunate crisis gave a new opportunity and shed light on the rehabilitation of the banking system.

To guarantee as somewhat more open environment in terms of foreign direct investment to encourage competition is of high significance. Same goes for promoting the use of new technologies and management practices. These efforts made were standing in relationship of establishing a stronger corporate governance system. In fact, the business firms in East and Southeast Asian countries, as indicated in the Table 4.6, were often under the control of a sole shareholder, and the links between business and government were immense. In case of South Korea, some strong measures for structural adjustment were executed. First, the government promoted the level of transparency in corporations by strengthening the audit procedures. Second, the requirements for derivative suits were alleviated in order to strengthen and enlarge the shareholders' rights. Third, by conceptualizing the director's fiduciary duty, government regulated the legal responsibilities of de facto directors including master s