The Asian crisis of 1997 gives us a valuable lesson that foreign direct investment (FDI) can play a more important role than other capital flows such as bank lending and portfolio equity investment. This paper explains the relationships between FDI and the crisis. Specifically, the paper studies the role of FDI for a stable economic growth. Recent developments of inward FDI policies by the Asian member economies of APEC are then analyzed after they are categorized into four groups within a framework that is developed in this paper. Some important, generalized implications for FDI policies are also provided.
Key words: Asian Crisis, Foreign Direct Investment, Economic Growth, APEC

I. Introduction

II. Economic Crisis Revisited
1. IMF Programs in Three Asian Economies
2. Debates over the Asian Economic Crisis
3. Real Causes of the Crisis

III. FDI as a Source of Sustained International Competitiveness

IV. Individual Action Plans of the Asian Member Economies of APEC
1. Group1: Hong Kong, Singapore, and Malaysia
2. Group 2: Janap and Chinese Taipei
3. Group 3: China, the Philippines, Indonesia, and Thailand

V. Conclusion