More than a year after the outbreak of the Asian financial crisis, there still does not seem to be a consensus as to its proximate causes and therefore what measures ought to be attended to avert its recurrence. There have been many attempts at quantitatively measuring the degree of importance of the different factors in the evolution of the Asian crisis but events are still unfolding until there is a definite “bottoming out” and a return to the growth experiences of the past these attempts remain incomplete. This paper suggests that the underlying factors that drive FDI inflows have remained important and are apparently independent of the underlying causes of the crisis in the first place. Put differently, the country fundamentals have been influencing FDI inflows more than any other factor. In other words, the transitory nature of the crisis did not deter the relative attractiveness of the Asian countries to foreign direct investments as reflected by their inflows subsequent to the outbreak of the crisis.
