Walking the streets of Bangkok's central business district today, it's hard to imagine that just ten years ago, Thailand's economy collapsed, destroying more than 50 Thai financial companies and leaving many Thais in economic ruin. At the shopping malls along Ploenchit Road, throngs of Thais in sharp suits, carrying laptops and mobile phones, crowd into upscale stores selling the latest fashions and restaurants offering pricey fusion food. At Bangkok's stock exchange, clerks record a dizzying rise in share prices, and Thailand's currency continues to strengthen against the U.S. dollar. New condominiums are springing up across town, taking the place of ghostly skeletons of half-built buildings where construction halted during the financial crisis.

Across Asia, in fact, the financial crisis, which started a decade ago this month with the collapse of Thailand's currency, seems like a long time ago. Asia has once again resumed its longtime role as tiger of the global economy; the Asian Development Bank projects that East Asia will grow by 8 percent this year. In five of the nations hit hardest by the crisis, average incomes now equal or top 1997 levels, and all of the major Asian countries sit upon significant piles of currency reserves, determined to prevent a repeat of 1997, when the Thai treasury essentially ran bare. Asia has begun developing its own financial architecture, including a free trade agreement between China and ten Southeast Asian nations, and a series of currency swaps that might set the stage for a region-wide version of the International Monetary Fund. From Jakarta to Taipei, Asian developers are building massive new real estate projects.

But beneath the gold-plated surface, many of the problems that caused the crisis have not been resolved. For decades, Asian economies like Thailand and Malaysia grew by relying on exporting to the West, including low-value and medium-value manufactured products. But an economy cannot grow on exports alone, and few East Asian nations have developed strong local consumer markets. Instead, they have simply gone back to their old model and exported their way back to growth. And as China--and low-cost Vietnam--increasingly dominate manufacturing, higher-wage nations like Malaysia will not be able to compete. Perhaps unsurprisingly, when tech giant Intel recently scoured Southeast Asia, deciding where to invest, it picked Vietnam as the home for a $300 million new factory. (Indeed, investment in many Asian nations outside India and China remains weak.) "People aren't investing in Malaysia--even Malaysians are all looking somewhere else to invest, like China," one prominent Malaysian economist told me.

Many East Asian nations suffer from other unresolved issues. Though countries like Thailand boast strong primary education, which created a literate workforce necessary for basic manufacturing, they have not developed enough sophisticated secondary schools to make their citizens competitive in information technology, English, and other high-end skills of the twenty-first century. Instead, these nations lose ground to English-speaking India and face a situation where only a small percentage of their populations thrives, while their income inequality worsens and average people buy new mobile phones, cars, and clothes on credit. Already, the Philippines suffers from Latin American levels of inequality, with a tiny wealthy elite sipping coffees at Starbucks in Makati, the business district, while more than 100,000 people in Manila make a paltry living scavenging through the city's garbage.

Even the region's wealthiest nations, like Singapore, struggle to develop creative citizens who can start their own companies. Singapore's famously plan-oriented government has determined that its citizens must be creative, and it has launched a raft of state creativity-oriented initiatives, from building a new arts complex to allowing bar-top dancing, to get strait-laced Singaporeans to loosen up.

Worse, the type of local entrepreneurship needed to create a vibrant economy still has not been created. In the wake of the crisis, stories emerged about Thai businessmen ruined by the currency meltdown who valiantly started new companies, like Sirivat Voravetvuthikun, a former real estate developer who lost nearly $9 million in the crisis and founded a new business selling sandwiches on the hot pavement of Bangkok. But, ten years later, the sandwich king has not expanded his business as dramatically as he had predicted. In fact, small business people in Asia like Sirivat do not enjoy easy access to loans from banks or government agencies like America's Small Business Administration.

Then there is corruption. The opaque, internecine network of ties between companies and banks led to many shady deals in nations like South Korea and Thailand, in which banks made loans without really assessing whether the borrower was a good risk. The shock of the crisis was supposed to improve corporate governance, and indeed some nations have learned. South Korea, for example, has cleaned up its famously murky business practices and instilled strong regulation in its financial sector. But others have not--China, for one, where the financial press chronicles one massive banking scandal after another. In fact, as The Economist noted, a study by the Asian Development Bank showed that in Indonesia, Malaysia, the Philippines, and Thailand, there was less accountability and other indicators of good governance in 2005 than there was in 1996.

With their massive currency reserves, most Asian nations are relatively immune from another total meltdown. And without a crisis to spur more reform--in education, or corporate governance--countries like Thailand may continue to muddle along, growing but never leaping into the ranks of developed economies, as many Thais once hoped. Their economies may have rebounded, but the payoff isn't there.

This article was originally published in July 11, 2007 edition of The New Republic (online).