BANGKOK, THAILAND — Just 35 years ago, the tallest buildings in Thailand's capital were modest apartment blocks of a half-dozen stories.
Bangkok's palm trees have since been elbowed aside by huge skyscrapers - concrete evidence of the booming economic growth that has generated profits for everyone from Thai entrepreneurs to Japanese corporations to American mutual-fund investors.
But now almost everyone agrees there are far too many high-priced towers. They have come to symbolize the problems facing the economies of Southeast Asia: overinvestment and overcapacity. This summer's sudden drop in the value of some of the region's currencies, especially the Thai baht and the Philippine peso, has dampened visions of endless growth.
Now Thailand, whose economy has been the fastest-growing in Southeast Asia, is turning to the International Monetary Fund for assistance. "The IMF should bring confidence back to the country on the financial side, but we have real problems to take care of," says an economist at a prominent research institute in Bangkok.
The IMF is also providing emergency loans to the Philippines.
But observers note that the crisis ultimately should have a strengthening effect on the "tiger" economies of this dynamic region.
Still, turning to outsiders for help does not come easy to Southeast Asians, who take pride in the economic success that has led several of them to become known as economic "tigers" in recent decades. Indeed, one tendency so far has been to blame foreigners for their troubles.
Thai officials raided two foreign securities firms on July 15, searching for the source of faxed rumors about the insolvency of some Thai banks, creating an atmosphere in which even economists want to go off the record.
Some Filipino critics have likened the IMF's help to a return to colonial-era reliance on the United States. And Malaysia's Prime Minister, Mahathir Mohammed, blames the currency instability on "rogue speculators," naming in particular the US financier George Soros.
Both Mr. Soros and the US government say Mr. Mahathir's allegations are groundless.
Learning the global game
But it is not as if this dynamic region is about to go under. Instead, a transformation is under way, one that should make Southeast Asia's economies more prepared to participate in the global economy.
The currency crisis, says Peter Brimble, an economist and consultant with the Bangkok-based Booker Group, "is just a real good lesson" for officials and businesspeople throughout Southeast Asia.
They are learning that it is increasingly difficult to protect currencies and industries from international market forces and that a more sophisticated economy can be tricky to manage.
The economies of Thailand, Malaysia, Indonesia, and, to a lesser extent, the Philippines, have prospered in recent decades by cheaply producing goods for export.
Technology and investment have often come from foreign companies and investors interested in exploiting the region's relatively low cost of labor.
Sharp-eyed government economic planners, often inspired by the way Japanese officials have guided their own industries, have tried to keep this process smooth and steady.
The result, in Thailand's case, has been two-and-a-half decades of consistent economic growth, with gross domestic product expanding by anywhere from 5 percent to 12 percent a year.
Keeping exchange rates stable has been a key aspect of the bureaucratic oversight, since overseas investors want assurances that their business profits won't be nullified by currency fluctuations.
Often the need for stability has meant government "fixing" of the exchange - linking it to the American dollar or some combination of foreign currencies - and analysts say Thailand has been too slow to move away from this system.
This summer has shown that market forces can't be kept restrained forever.
Currency traders looked at the Thai economy - with a bloated commercial real-estate market and a growing number of financial institutions with portfolios full of bad property loans - and decided the Thai baht was overvalued.
Thai central bankers tried to prop up the value of their currency, but on July 2 decided to let the value of the baht be set by the market.
It immediately lost one-fifth of its value, triggering the weakening of the Philippine peso and other regional currencies like the Malaysian ringgit and the Indonesian rupiah.
Competition from China
Weakened currencies aren't the only wake-up call. The more established economies of Southeast Asia are facing new competition from China, where labor is cheaper and the domestic market is bigger. As Thailand's commercial real-estate glut shows, investment has created overcapacity in some areas, while too little has been spent on education and creating the value-added industries necessary in more developed economies.
"The obvious thing" for Thailand to do now, says Nimit Nontapunthawat, chief economist of Bangkok Bank, "is to reduce consumption and investment that is unproductive." That means encouraging less spending on foreign luxury goods and less investment in real-estate projects in big cities.
Even a casual visitor to Bangkok can't help but notice the huge "sale" signs in front of boutiques bearing foreign brand names and the remarkably cheap price of high-end hotel rooms. (See story at bottom left.)
This crisis isn't causing the region's governments to reevaluate the export-oriented economic strategy that has worked so well so far, but analysts say that Thailand and other countries must begin to think more strategically.
Future prosperity, Mr. Brimble says, lies in investing more in education, upgrading the financial system, and creating the government-backed institutes and partnerships that could enable industries to compete more effectively with those in the most advanced economies.
In the meantime, economists predict that Southeast Asians will have to content themselves with slower growth. Instead of growth rates near 10 percent, economies will slow down and expand by less than 5 percent or so.
"The economies of this region are somewhat overheated," Mr. Nimit concludes, voicing a widespread if unhappy realization.