News Tips: Economists Assess Asian Financial Crisis

As the Asian financial crisis continues to have a growing impact on Washington State’s economy, a
group of Washington State University agricultural economists and researchers are assessing its
consequences for the state’s agricultural and forest-product exports.
“The first impact has been fewer purchases and lower prices for many products sold in Asia because
of the lower purchasing power of Asian customers,” said Desmond O’Rourke, a WSU agricultural
economist. “That impact has been most severe on apples, where world supplies have been growing at the
same time that Asian demand slipped.”
O’Rourke, who directs the university’s IMPACT Center, attributes the current Asian economic crisis
to an overexpansion of borrowing based on hard currencies.
Indonesia provides a good example. Until last July, the government and corporations there had borrowed
heavily in dollars and other strong currencies. The fall of the value of the Indonesian rupiah, coupled with
resulting bankruptcies, loss of jobs and incomes, has led to a steep rise in the cost of U.S. goods in
Indonesian currency.
“From the perspective of U.S. exporters, Asian customers got dramatically poorer at the same time
that prices of U.S. goods rose and prices of many competing goods fell — a triple whammy,” O’Rourke
said. Washington State’s tourism and travel industries also have been hard hit by the Asian economic
IMPACT is the International Marketing Program for Agricultural Commodities and Trade.
Established in the mid-1980s as an integral unit of the WSU College of Agriculture and Home Economics,
the program addresses technical, economic and social problems arising in international markets.
A leading authority on Washington State’s fruit industry, O’Rourke has taught agricultural marketing
and policy and done research on international trade and agricultural products at WSU since 1970.
Recent CBS News, Wall Street Journal, Economist, and “Jim Lehrer News Hour” (PBS) stories about
the Asian financial crisis have consulted the WSU scholar. He is the author of “The Changing Dimensions
of U.S. Agricultural Policy” (1977) and “The Apple World Market” (1994).
O’Rourke received his doctorate in agricultural economics from the University of California at Davis in