Attaction of foreign inflows in East Asia

East Asian countries generally adopt more conservative fiscal stances than Latin American countries.Most FDI in East Asia has been of this productive type, and its impact has been manageable.Managing Capital Flows in East Asia.The overall impact of foreign investment on growth and exports has been very positive.As capital, domestic and foreign, to seek the highest rate of return in only market.Higher interest rates attract more foreign capital, increasing reserves.The increase in capital inflows offsets the higher current account deficit.If circumstances lead to price volatility in foreign markets, new placements will be inhibited.The bailout contrasted strikingly with IMF treatment of indebted firms in Asia.Until 1997, Western creditors were bullish on Asia and emerging markets generally.