Asia's economies strong despite SARS, Iraq<\/p>\n
Karl Malakunas, Agence France-Presse, Singapore<\/p>\n
Asia's economies emerged from the wreckage of SARS and the
\nIraq war with surprising strength in 2003, with China's seemingly
\ninexorable rise expected to fuel an even better regional
\nperformance this year.<\/p>\n
Severe Acute Respiratory Syndrome (SARS) had the biggest
\nimpact on Asia's economies in the first half of 2003 after
\nemerging from the crowded markets of China's southern Guangdong
\nprovince the previous November.<\/p>\n
The highly infectious virus killed 774 people out of more than
\n8,000 infections globally, with most of the victims in East Asia,
\nbefore being brought under control by June 2003.<\/p>\n
At the height of the crisis there were fears the effects of
\nSARS on many businesses would be equally deadly as regional
\ntravel ground to a near standstill and economies around the
\nregion either shrank or slowed significantly.<\/p>\n
The Asian Development Bank estimated SARS cost the Asian
\neconomies as much as US$60 billion, or more than 1.5 percent of
\nthe region's gross domestic product (GDP), with Singapore, Taiwan
\nand Hong Kong among the worst hit.<\/p>\n
The Iraq war, which began when SARS was at is peak, also hit
\ntrade and business sentiment, while the poor performance of the
\nUS economy completed a gloomy hat-trick of negative factors.<\/p>\n
Yet the Asian economies proved unexpectedly resilient, thanks
\npartly to the US economy rallying in the second half of 2003,
\nChina's continued growth and a rapid pick-up in air travel.<\/p>\n
In Singapore, for example, GDP shrank 11 percent in the June
\n2003 quarter on a quarterly basis, then rebounded with a 17
\npercent expansion for the following three months, its fastest
\nquarterly increase in eight years.<\/p>\n
Hong Kong recorded a similar pattern, downgrading its GDP
\nforecast for 2003 by half to 1.5 percent as a result of the SARS
\ncrisis, then readjusting it back to 3.0 percent on the back of a
\nthird quarter rebound.<\/p>\n
The relentless Chinese economic machine handled the crises
\nmuch better than its smaller neighbours and is officially on
\ntarget for an 8.5-percent expansion in 2003 compared with average
\ngrowth of 7.7 percent for the past five years.<\/p>\n
With similar figures forecast for this year, China is expected
\nto be the driving force behind Asia maintaining its status as
\nhaving the fastest economic growth in the world.<\/p>\n
The International Monetary Fund said in its World Economic
\nOutlook in September, 2003 that growth in Asia outside Japan
\nwould be 6.5 percent this year.<\/p>\n
\"Despite the slowdown since early 2003, the Asia Pacific
\ncountries are again set to be the world's fastest growing region
\nthis year and growth is expected to pick up further next year,\"
\nthe IMF said.<\/p>\n
Japan's slow escape this year from the quicksands of its long
\neconomic stagnation has also lifted prospects elsewhere in Asia.<\/p>\n
However, the world's second biggest economy is still more
\nsubdued than for most of the region, with the latest government
\nforecasts predicting 2.0 percent growth for the current fiscal
\nyear to March, slowing to 1.8 percent in 2005.<\/p>\n
At the other end of the spectrum, Thailand's economy surged on
\nthe back of Prime Minister Thaksin Shinawatra's sometimes
\ncontroversial policies, with official GDP forecasts of 6.3
\npercent in 2003 and 7.0-8.0 in 2004.<\/p>\n
Neighbouring Malaysia is expecting 6.0 percent economic
\ngrowth, Singapore 3.0-5.0 percent and Indonesia 4.5 percent.<\/p>\n
In North Asia, South Korea is also looking forward to putting
\nthe troubles of 2003 behind it with 5.2 growth this year while
\nTaiwan is also expected to pick up steam with a 5.0 percent
\nexpansion.<\/p>\n
India is the relative bright spot in South Asia with the
\ngovernment forecasting GDP to grow by more than 7.0 percent this
\nyear while the economies of Pakistan and Sri Lanka continue to
\nsuffer from political tensions and internal conflicts.<\/p>",
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