[MALAYSIA'S ALTERNATIVE STRATEGY]IntroductionThe Asian financial crisis of 1997 drew attention to the fragility of our global economic system when it is overexposed to foreign intervention in markets, or when underperformance remains unchecked. Before June 1997, the Republic of Korea faced problems when 10 of its 30 top-performing chaebols (conglomerates) collapsed under debt that far exceeded their respective stocks. Korean steel production giant Hanbo faced additional difficulties after racking up $4.39 billion in debt for a new steel plant. Kia Motors fell due to the accumulation of nearly $2.1 billion in loans made on a "need" basis, as opposed to independent judgment of credit and cash flow determined by the lending authority. The central banking authorities of Indonesia, Hong Kong, Thailand, the Philippines and Malaysia were threatened when their respective currencies were rocked by speculative attacks from foreign investors. Political theorists have multiple hypotheses as to the absolute cause of the 1997 Asian financial crisis, but Thailand is one country that most analysts focus on. year, and the deficit continued to widen. In 1996, the current account deficit was -7.887 percent of GDP ($14.351 billion). Aware of Thailand's economic problems and the exchange rate of its basket of currencies, foreign speculators were certain that the government would devalue the baht again. In the spot market, to force devaluation, speculators took out loans in baht and made loans in dollars. In the futures market, speculators bet against the currency by entering into contracts with...... middle of paper ......ia. Hencyclopedia, nd Web. April 5, 2014. .Zumkehr, Hye Jin. “Malaysia and South Korea: a decade after the financial crisis.” » Chulalongkorn Journal of Economics 20.1 (2008): 1-26. Chulalongkorn Journal of Economics. Internet. April 1, 2014. .Economist. “Ten years later.” The economist. The Economist Journal, July 4, 2007. Web. April 5, 2014. .Kaplan, Ethan. “Have Malaysia's capital controls worked? » National Bureau of Economic Research (2001): 3-40. National Bureau of Economic Research. . April 1, 2014. .PBS. “Timeline of the Asian Financial Crisis.” PBS. PBS, March 1, 2000. Web. March 29. 2014. .