Economic Crisis and Its Social Impact: Lessons from the 1997 Economic Crisis

Abstract

The objective of this paper is to survey the social consequences of the 1997 Asian financial crisis with the purpose of drawing lessons for addressing the current economic crisis. The outbreak of the financial crisis and the ensuing increase in unemployment and poverty triggered worsening of education and health outcomes. The situation stabilized and eventually improved only after massive government intervention in the affected countries. Employment creation programs and cash transfers played a critical role in alleviating poverty, while education, nutrition and healthcare programs helped contain emergence of long-term adverse effects.