others because they have lesser buffers and even if they have, they are inadequate. It is after all the poor that engage in informal sectors and are usually the unskilled labors. It is also the poor that are experiencing unemployment more than the others due to lack of education.
Now on the larger scale is the impact on the institutional level of the global financial crisis. The financial crisis began in United States in 2007 and spread to other countries. The crisis was triggered by a liquidity shortfall in United States banking system and resulted to the collapse of financial institutions. Asia is one major continent in which the recent financial crisis had spread. The impact of the crisis had far reaching effects on the economy of Asia than many people had anticipated.
Historically, the economy of many Asian countries was extremely strong compared to that of most advanced Western economies. Before the spread of the crisis, most Asian countries had a well structured economy. Nonetheless, these nations felt the. The major economic sectors that have been implicated by the financial crisis include export and equity markets. Sharp decline in exports across the nation was the first impact of the crisis. Asia is one of the major exporters of various commodities in the world. The crisis is seen to have affected the capacity of many Asian countries to export their commodities.
One major problem of Asian countries is dependence on European and U.S markets regions in which the financial crisis developed. The crisis had an effect on the income of many employees in those nations. The spending patterns of individuals changed and thus had an effect on exports. Exchange rates also changed as a result of the crisis whereby the Yen traded badly against dollar.
Exportation of products is linked with exchange of foreign currencies between countries in trade. As a result of the financial crisis, the currency of Asian countries became weak against other currencies. This made the countries stop engaging in international trade as a result of poor returns. However, in the recent years, credit markets in Asia have emerged and domestic demand of goods and services has softened (Levinson, 2009). It is a sensitive sector that has been heightened by good strategies related to export that were taken by many countries.
Most economies in East Asia showed signs of decline back in 2008 and 2009. Singapore is one major country in the continent of Asia that was adversely affected in exportation of manufacturing goods. The growth in domestic product declined from 7.8% in 2007 to 1.1% in 2008. Signs of recovery were noted in the second half of 2009 as a result of stimulus packages and recovery in global trade. Trade channel is one channel that led to transition of financial crisis in many Asian countries (Philip, 2007).
Import demand from European nations, Japan and United States had declined during the period of economic downturn but it has improved by a small...