Response to balance of payments crises in the 1970s : Korea and the Philippines

Korea and the Philippines today are among the East Asian countrie_ most heavily burdened with external debt. This is a result, of course, of heavy borrowing to finance current account defici=s it, the 1970's. How Co account for these deficits ar_i an analysis of the two countries' re_pon_es and their consequences is the subject of thi_ paper. Taking balance of payments crisis to mean a sharp rise in the current account deficit, financed by running down foreign exchange reserves or external borrowing, two period_ of crisis have been identified for both countries, 1974-7-I and 1979-82. While the focus is on theme periods the analysis is put in the perspective also of the trends of the preceding decade.