Devising Adequate Social Safety Nets:

One of the most  important lessons of the Asian crisis is that adequate social safety nets need to be  set  in place. In  the era of global interdependence including in the area of capital markets, risk of crisis would always remain with economic openness. While  it  is  imperative to calibrate capital market integration  and regulate short term  volatile capital  flows, it  is  equally important to build institutional mechanisms  to deal with occasions  of crisis.  To this end, one of  the very significant  responses at the national level would be  to develop  adequate social safety nets for  the  people. This would help minimising the adverse  impact of crisis on those who are already poor those whose social conditions deteriorate due to crisis as experienced in all the countries of the Asian region.