Businessweek Archives  What Asia And The World Must Do    There
are moments in capitalism when financial plagues break out with
such speed and intensity that the international economic
community is astonished. The Asian financial collapse is one
such event, as were the panic of 1907 and the failure of
Austria's Creditanstalt Bank in 1931. In the first instance,
J.P. Morgan stepped in and contained the infection. In the
second, policy mistakes turned a serious recession into a long
depression. Today, with a de facto debt moratorium in place and
a recession under way, Asia is unleashing deflation into the
world economy. Should China devalue its currency, the world
could find itself in an agonizing slowdown.  The Asian crisis is
a solvable problem. But serious blunders could allow it to
spread in dangerous ways. Already, analysts have shaved as much
as a full percentage point off their estimates for global growth
for 1998. They have consistently underestimated the impact of
the Asian crisis and it could get wors