Part 5/10:
Despite the seemingly bulletproof nature of their economies, some "cracks" had started to form. The enormous capital influx led to rampant speculation and unsound investments. Real estate and various public works projects flourished, but many were scarcely utilized, revealing the fragile underpinnings of a rapidly inflating economic bubble.
Contributing to the problem was a gradual erosion of competitiveness as the dollar appreciated, diminishing the export markets for these nations. Underperformance in exports became evident by 1996, resulting in considerable current account deficits, which were disproportionately financed by foreign debt. By 1996, the foreign debt of these countries had reached over 165% of their GDP.