The financial crisis that has gripped the United States has particular resonance for Asia, which was racked by its own financial crisis 11 years ago. Indeed, some of the root causes of the two crises are similar, which has sparked some concern in Asia. But, as VOA correspondent Gary Thomas reports, there are also some sharp differences as well.
In 1997, the talk of the financial world was the "Asian Tiger" as Asian economies, and particularly those of South Korea, Thailand, Malaysia, the Philippines, and Indonesia boomed with phenomenal growth rates.
Ted Truman, former U.S. Assistant Secretary of the Treasury for International Affairs, said the good times could not last.
"Asia had had a miracle, the Asian miracle, so their policies were good, fiscal policy was good," he said. "They had weak banking, financial systems, and they had unsustainable exchange rate regimes."
The crisis is believed to have started in Thailand as jittery investors started causing currencies to drop in value. Asian governments exhausted foreign reserves in failed attempts to hold off currency speculators. The crisis spread across Asia like a virus. Once-rich stockbrokers turned into sidewalk food vendors and tried to unload their Mercedes-Benz automobiles and jewelry at bargain prices at impromptu street markets.
Sliding currency is not a hallmark of today's U.S.-based crisis. But as Ted Truman - now senior fellow at the Peterson Institute of International Economics - points out, the U.S. and Asian crises are both predicated in large part by a collapse of confidence in credit.
"You had a system that was built on credit, and when people started questioning the underlying value of the credit, things started going bad," he said. "And indeed the underlying value of the credit was bad."
Just as the subprime housing market collapse was a major catalyst of the 2008 crisis, real estate speculators took out huge loans to build commercial real estate during the boom times in Asia. When the loans could not be paid back, banks collapsed, currencies plummeted further, and unfinished office blocks - which Thais took to calling "ghost buildings" - dotted the Bangkok skyline.
The most adversely affected nations - South Korea, Thailand, and Indonesia - had to turn to the International Monetary Fund for help. But many Asians saw the conditions for economic reforms the IMF attached to the loans as humiliating.
Ted Truman says some Asians must be reveling in the irony that the United States is making some of the same moves in its crisis that it urged Asian nations not to make 11 years ago.
"They can say, 'gee, you run around lecturing us for all the things we did wrong, but it's not clear that you've done such a great job yourselves' - with some merit," he said. "They also said, 'gee, you said we shouldn't be bailing out our financial institutions' - where[as] we seem to be bailing out our financial institutions, though I think we're doing less bailing out of the institutions, as opposed to rescuing the system, than they did. We told them they shouldn't lower their interest rates, and we have lowered our interest rates. On the other hand, they had plummeting exchange rates, and we did not."
It is not clear yet how much fallout, if any, Asia will suffer in the current crisis. Analysts say, however, that the region learned some hard lessons and has put protective mechanisms in place.
Gus Faucher, the Director of Macroeconomics at the economics Web site Moody's Economy.com, says the healthy economies of the larger countries in the region provide something of a cushion against any repeat of the hard times 11 years ago.
"The one advantage Asia has right now is that China continues to expand, the Indian economy continues to expand, so Asia as a whole is less dependent on the U.S. for demand," he said. "That provides some measure of protection against collapse in the U.S. So in that respect the Asian fundamentals look okay."
Still, some nations in the region are taking additional steps to protect themselves. Having suffered a severe financial illness more than a decade ago, Asia is not anxious to catch that virus again.
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