Asian crisis to be protracted: WB<\/p>\n
SINGAPORE (AP): Experts who thought the Asian financial crisis
\nwould be short lived are now predicting it will be \"painful and
\nprotracted,\" a regional World Bank official said yesterday, as he
\nurged regional bankers and governments to restructure, reform and
\nopen up their systems.<\/p>\n
Recent estimates \"indicate a far more severe collapse in
\ndomestic demand and sluggish growth,\" than expected in South
\nKorea, Indonesia and other countries, said Javad Khalilzadeh-
\nShirazi, the World Bank regional manager.<\/p>\n
\"The crisis will be painful and protracted with major social
\nand economic consequences in a part of the world that was
\nregarded as an economic miracle,\" Shirazi said, opening a two-day
\nseminar on \"Global Lessons in Banking Crisis Resolution for East
\nAsia.\"<\/p>\n
Because of the severe social consequences of the economic
\ncrisis, \"an unemployment safety net must be the highest priority
\nin Asia, to sustain growth in an unstable situation,\" Shirazi
\nsaid.<\/p>\n
Many Asian nations do not have unemployment insurance or
\nextensive welfare benefits. As thousands of people lose their
\njobs in an economic crisis, many end up on the city streets, or
\ngo home to their already poor villages.<\/p>\n
He said the Institute of International Finance has estimated
\nthat the crisis will cause Asian countries US$100 billion in lost
\nGDP growth, and that some countries will experience negative
\ngrowth ranging from 3 to 12 percent this year.<\/p>\n
Separately, a second major investment concern, J.P. Morgan,
\nsaid in a report released Monday that Singapore may go into
\nrecession this year. The Singapore government is still predicting
\nat least 2.5 percent growth, but its economy is strongly tied to
\ninvestment and exports to its neighbors.<\/p>\n
Singapore's deputy prime minister and head of the de facto
\ncentral bank, Lee Hsien Loong, told the banking seminar that
\nbecause of the unstable situation, the republic will proceed more
\ngradually with financial sector reforms \"rather than a big bang.\"<\/p>\n
The Monetary Authority of Singapore, which Lee heads, will
\nincrease its supervision of financial institutions, while
\nencouraging the island's traditionally secretive banks to give
\nmore information, and boost investor confidence.<\/p>\n
\"Far from the bad news spooking markets, the candor and
\nopenness has boosted confidence that problems will not be swept
\nunder the carpet, or allowed to fester,\" Lee said.<\/p>",
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