keen for larger market shares of expertise, goods and services and financial resources, the critical issue is whether the resultant economic growth is well-balanced and based on a sound foundation. The recent currency and financial turmoil in Southeast Asia is an example from where many lessons may be learned. Southeast Asia, a region that once was admired for its phenomenal growth and prosperity, suddenly seemed to be on the brink of an economic, social and environmental abyss. Currency and financial troubles had severely hurt many companies which had incurred heavy liabilities and found difficulty to pay off their debts. Banking institutions had also borrowed heavily from abroad and provided credit to sectors which are now non-performing. This was aggravated by large withdrawal of funds from Southeast Asian countries by external investors which caused an extremely bearish sentiment in their stock markets. The resultant sharp decline in the stock prices was reverberated throughout the world and cast aspersions on the sustainability of the growth strategy of the region.
Coincidently, Southeast Asia had simultaneously drawn global attention to its environmental problems. A gray-white haze from forest fires blanketed an area of roughly 2,000 square miles and affecting a population of about 70 million from four countries, obscuring skyscrapers, closing schools and airports and sending thousands to hospitals and clinics with respiratory problems.
People began to realize from the painful experience of Southeast Asia that rapid economic growth based on weak foundations, such as inadequate supplies of skilled workers, overborrowing by companies, bad lending practices by banks, overpriced and overbuilt real estate and artificially maintained exchange rates, can result in instability and volatility in the economies. The impressive growth rates, moreover, masked some other underlying fundamental problems, such as, natural resource depletion, environmental degradations, such as air and water pollution arising from overcrowding of urban habitats, weak and unregulated financial and banking systems, infrastructure bottlenecks, and a widening gap between the beneficiaries of the boom and the have-nots, as well as the rural-urban divide and corruption. In turn, failures to pay sufficient attention to social and environmental factors could seriously jeopardize the
