The Debt Crisis and its Impact on the Development of Southeast Asian Nations

Abstract

The creation of the debt crisis in Southeast Asian countries involves the less developed countries (LDCs), the central and international commercial banks in the First World, the transnational corporation (TNC), and the International Monetary Fund (IMF) and the World Bank (WB). The First World banks, the TNCs and the IMF-WB created and provided the LDCs with terms to make borrowing capital and consequently to incur debt inevitable. The contribution of capital, either by loan or aid, has served to build up a kind of economy in the LDCs that will service the Centers of Capital. LDC economies were restructured to export orientation. With that, LDCs now operate in an international monetary system and follow rules of the free market. Developed countries, on the other hand, have the power to erect impenetrable barriers to its export products. Although unacceptable to those controlling the Centers of Capital, LDCs should delink their trades with the capitalist system.