Asia still faces uphill battle: WB<\/p>\n
WASHINGTON (AFP): East Asia's recovering economies face an
\nobstacle-strewn road back to full prosperity and could be badly
\nhit by any prolonged slowdown in the U.S. economy, the World Bank
\nwarned Tuesday.<\/p>\n
In its annual survey of developing economies, the Bank said
\nIndonesia and the Philippines had the most fragile economies as
\nthey battle domestic instability.<\/p>\n
Despite considerable region-wide economic progress since the
\n1997 crisis, stirred by low interest rates and soaring exports,
\nthe report said \"reform fatigue\" and political turmoil could
\nstill exact a heavy toll.<\/p>\n
The report also cited external risks from \"a hard landing in
\nthe United States, a renewal of financial difficulties in Japan,
\nand a weakening of the electronics cycle.\"<\/p>\n
While estimating that these threats had been \"pushed back in
\ntime,\" the bank pointed out that the process of \"working out\"
\nfrom under post-crisis difficulties was still incomplete.<\/p>\n
\"Higher interest rates, and\/or slower growth could further
\nworsen financial conditions for many firms and consumers still
\nsaddled with high debt,\" the Global Economic Prospects and the
\nDeveloping Countries 2001 report said.<\/p>\n
In the post-crisis era, East Asian economies would also be
\nforced to divert precious resources into \"overcoming the legacy
\nof past institutional failures\" including non-performing loans
\nsuffocating the banking sector, said the Bank.<\/p>\n
The Philippines and Indonesia were especially at risk owing to
\npolitical weakness, civil disturbances and a perception that
\ntheir economies and business practices were still not
\ntransparent, it said.<\/p>\n
There was painful reading for the government in Jakarta.<\/p>\n
\"Indonesia stands out from the other East Asian economies. It
\nhas been buffeted by continuing instability ... and inflation
\nstarted a rapid rise in the third quarter,\" said the report.<\/p>\n
Even in countries that are in better shape, there is a danger
\nthat \"reform fatigue\" could further slow reconstruction, said the
\nbank, noting with dismay Malaysia's refusal to remove import
\ntariffs on automobiles.<\/p>\n
Smaller economies in the Asia-Pacific region also merited a
\nmention with the Bank noting political turmoil in Fiji and the
\nSolomon Islands and remarking that East Timor was slowly building
\nan economy from scratch, after being all but burned to the ground
\nafter voting for independence from Indonesia.<\/p>\n
Despite its woes, East Asia has a chance to progress by
\nimporting new business practices, technologies and knowledge,
\neven if it lags far behind the developed world in penetration of
\nelectronic commerce, the report said.<\/p>\n
The Bank said East Asian developing economies produced 6.9
\npercent growth in 1999, sharply up from a decline of 1.4 percent
\nin 1998.<\/p>\n
It forecast GDP growth of 7.2 percent in 2000 would moderate
\nto 6.4 percent in 2001 as \"sizzling\" export growth cools.<\/p>\n
In the long-term, the report foresees growth of 6.3 percent in
\nregional developing economies between 2000-2010.<\/p>\n
South Korea exhibited the fastest \"V\" shape recovery, the
\nreport said, while Indonesia \"barely reached positive territory,
\nfollowing its difficult economic performance of 1998.\"<\/p>\n
The plus factor for the region was largely the result of low
\nand stable inflation and interest rates, while weaknesses stemmed
\nfrom the slumbering equity markets in many economies.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asia-still-faces-uphill-battle-wb-1447893297",
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