Access the impacts of the AFC

The AFC undermined the political legitimacy of SEA governments who had based their political
legitimacy on promoting economic prosperity (SUHARTO SG)

From 1966 to 1998, Suhartos legitimacy had been on his ability to deliver economic growthThe AFC
had a fatal impact on Indonesias currency, causing the rupiah to trade from 2450 to 3670 from June
to October 1997 to the US dollar, causing it to lose half its value. This instantly made goods more
expensive to Indonesians, and conditions were deteriorating at an alarming rate and with Suharto in
October 1997 disobeying IMF and reopening 2 banks owned by the Suharto family, perhaps it was
inevitable that Indonesians had lost confidence in Suhartos ability and willingness to deal effectively
with the crisis, putting Suhartos legitimacy under threat. In 1998, the rupiah had bottomed out at
around 17 000 to the dollar at the end of January having lost 85 percent of its value and Indonesian
banks and companies were plunged into insolvency, the Jakarta stock market plummeted and the
savings of the middle class were wiped out. To make things worse, food prices were rising rapidly
because of poor harvest, depreciation of rupiah and cuts in food subsidies by the government. It was
thus inevitable that in May 1988, the killing of 4 demonstrating students at Trisakti University in
Jakarta by the Indonesian army sparked off the worst urban riots in Indonesian history, as the people
had become disillusioned with the government due to the impossibility of reform by the
government, regime corruption and economic collapse. As a result, Suharto family enterprises were
attacked with Liem Sioe Liongs Bank Central Asia a frequent object of attack. Suharto was forced to
resign in May 1998 and was replaced by his vice-president Habibie. Inflation had reached 65 percent
and some 113 million of Indonesians were below the poverty line. In contrast, Singapore

The AFC seriously undermined the foundation of SEAs economies as well as self-belief. (MALYSIA
THAILAND

Cause a serious impact on AFTA and seriously undermined SEAs future

Thailand economic collapse problems but pride in subsequent recovery without IMF aid

Mahathir blamed the West

Reject IMF and economic

THE AC EXARCEBATED THE UNDERLYING ETHNIC-RELIGIOUS TENSIONS THAT HAD BEEN

CONTAINTED under the context of regional economic prosperity AFC as catalyst to ignite this
tinderbox ethnic religious divisions

However, there were countries that were minimally affected by the AFC and this can be
understood because they were not fully integrated (Myanmar, Vietnam, Cambodia, Laos, Brunei)