Teri Szynskie
Staff Writer
University of Houston Professor of Economics Thomas R. DeGregori said he is optimistic about the future of the Asian economy that has been facing a crisis since last fall. In a lecture held Thursday in the Cullen College of Engineering D-2 building annex, DeGregori spoke in depth about the recent economic histories of Thailand, Malaysia, Singapore, China, Indonesia, South Korea and Japan and how they relate to the world economy as a whole.
He explained that the current economic crisis was due largely to reckless lending by European and Asian bankers and reckless borrowing by Asian businesses expanding amid already flooded markets. Deregulation of the private sector was also a culprit, he said.
DeGregori said that as long as investment and education continue in the affected countries they should recover, but each country has its own difficulty: Korea has a large base of skilled and educated people but also a huge debt structure; Malaysia has a good technological base but is facing changes in business practices; and while Thailand is viewed favorably by economists, it has neglected education.
The success of the Asian economies in the 20th century have been the best in human history, DeGregori said. While development in most countries means growing economic inequalities among the people, he said the Asian focus on primary education meant income gaps narrowed as the economies rapidly developed.
"In 1970, over 60 percent of the population of Malaysia was below the absolute poverty line," DeGregori said. "Right before the economic crisis, only 10 percent was (below that line).
"The Thailand, Malaysian and Hong Kong currencies were all pegged to the dollar," said DeGregori, "which is good only when the economy is doing well.
"Thailand was the first one to crack."
Nat Wilcox, UH associate professor of economics, said episodes of bubbles and crashes in the world economy may be unavoidable because of greed and cultural differences.
"There is something inherent in human psychology," Wilcox said.
Many UH students who come from the affected Asian countries are experiencing hardship, said DeGregori. Because of devalued currency, the students' parents are finding it difficult to support their children's educations.
Anita Gaines, director of International Student and Scholar Services, said that while UH's international student enrollment has increased, the university has experienced a slight decrease in enrollment by students from the affected Asian countries.
To help the affected Asian students cope with financial difficulties, Gaines said the U.S. Immigration and Naturalization Service will have interim regulations in place by the end of March that will specify measures the university may take with these students. Gaines said the provisions will more than likely allow students to reduce their course loads while retaining their legal student status and may give students employment options.
Gaines added that it is important for students who are affected by the Asian economic crisis to come to the International Student and Scholar Service office as soon as possible to discuss their options. For assistance, call (713) 743-5069.