Since 1997, the Asian countries have been under economic crisis. The crisis greatly affected the lives of people because the costs of living increased and job opportunities lessened. In addition, the population continues to increase and that adds to the ongoing crises. This resulted in the labor force's demand of increasing their salary. However, most of the employers are experiencing financial difficulties that their demands were not granted. More business establishments closed because of increased production costs thus making their business no longer viable. More workers lost their jobs. The September 11 attacks in the United States worsened the current economic problems. Stiff competition, high-priced basic commodities, and high labor cost are the main factors that cause an industrial collapse in a worsening economy. .
The primary cause of an industrial collapse is the rigid competition among companies. Buyers look for new products with a high quality at a lower price. The quality of the products, prices, and services that go with it are the major factors affecting a company's survival; therefore, companies have to reduce costs of production to be competitive. In addition, new entrants in the industry challenged the existing companies to do better in order to survive. This situation benefited the customers due to different options available to them. The company that produces better quality at the least price product gets the market while the company that operates with least operating costs gets larger margins; thus, it incurs more profit. As a result, a company that can't cope with rigid competition tends to lose profits, which leads to bankruptcy. This can lead to massive layoffs or in worst scenario, closure of the company.
Secondly, prices of basic commodities tend to increase during an economic crisis. Currency devaluation or shortage in its supply causes high prices of commodities.
