Abstract

ainable growth. It also draws policy lessons for managing corporate and financial distress. The chapter reaches the following conclusions: . The ongoing recovery is still fragile and uneven. The externally triggered liquidity crisis during the second half of 1997 indiscriminately submerged both strong and weak producers and financiers. The rising tide is lifting the strong, especially those benefiting from trade growth in electronics products, but the financially weak continue to struggle on account of both crisis-induced and long standing vulnerabilities. . Without vigorous corporate and financial restructuring, the return to sustainable growth will likely take longer, the fiscal costs of the crisis could rise, and the economies will remain vulnerable to new external and internal shocks. Weak firms in East Asia operated on thin margins in the years leading up to the crisis, and their inability to pay interest following the onset of the crisis has added to their debt burden. Such

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