Global IT demand to support Asia's economic growth<\/p>\n
SINGAPORE (AFP): Global demand for information technology
\ngoods and services will increasingly underpin Asia's economic
\ngrowth, a report by research house Salomon Smith Barney said.<\/p>\n
But for several countries in the region, leadership problems
\nas well as separatist rebellions in Indonesia and the Philippines
\nwould remain a concern for investors, it said.<\/p>\n
Surging productivity in the United States, largely related to
\ntechnology investment, and a sharp increase in electronics and IT
\norders in Japan bode well for the region -- a key producer of
\nthese products.<\/p>\n
The report received at the weekend said global growth has been
\ndominated by the IT sector and its impact is likely to benefit
\nthe region substantially.<\/p>\n
Singapore, Taiwan, South Korea, Malaysia and Taiwan have been
\namong the major contributors to the IT boom.<\/p>\n
"The traditionally strong correlation between Asian and global
\ngrowth is still there," Salomon Smith Barney said.<\/p>\n
"Global tech does not have more influence than non-tech on
\nAsian growth but it is faster growing.<\/p>\n
"More importantly, the tech up-cycle still has further to run,
\ninto at least 2002, providing important support for Asia's
\ngrowth," it added.<\/p>\n
The IT sector has been growing more rapidly than the non-tech
\nsector, Salomon Smith Barney said.<\/p>\n
It cited the United States where IT expanded at an average
\nannual rate of 30 percent in the 1990s compared to 2.5 percent
\nfor the non-IT sector.<\/p>\n
The research house said it had raised its gross domestic
\nproduct projection for Asia next year to 6.7 percent from 6.6
\npercent.<\/p>\n
"At an industry level, our analysts remain confident that the
\nIT cycle will persist into 2002, driven by among other things the
\ndiffusion of telecoms," Salomon Smith Barney said.<\/p>\n
"With tech growth the dominant force in IP (internet protocol)
\ngrowth globally and within much of Asia, this is crucial to our
\ndemand view," it said.<\/p>\n
IT also sparks growth by lowering the costs of information and
\ncoordination as well as easing uncertainty, which is important to
\nincreasing global trade.<\/p>\n
"Investment in technology is an increasing feature of Asian
\ninvestment, boding well for gains in productivity and growth,
\nespecially in North Asia," it said.<\/p>\n
But, with the risks from external shocks diminishing, domestic
\npolitical conditions are likely to take on greater weight in
\ndetermining growth prospects, the report added.<\/p>\n
"Within Asia, the general lack of macroeconomic imbalances
\nshould mean that either politics or policy shifts are likely to
\ntake center stage," it said.<\/p>\n
"This is especially true in Indonesia, the Philippines and
\nThailand, but also China and Taiwan."<\/p>\n
Leadership problems as well as separatism in Indonesia and the
\nPhilippines remain a concern.<\/p>\n
"We expect fractured politics to keep investment down and
\nmarkets guessing, although probably not enough to forestall
\nmodest improvements next year," Salomon Smith Barney said of
\nIndonesia.<\/p>\n
On the Philippines, it said: "The dominant issue remains the
\neffectiveness of the (President Joseph) Estrada administration."<\/p>\n
Turning to Thailand, it said investors remain concerned over a
\npolicy vacuum or shift resulting from a change in government.<\/p>\n
China-Taiwan tensions might be heightened by any US decision
\non theater missile defense for Taiwan. There was also concern
\nover the new government's ability to run the civil service after
\nyears of leadership by the Kuomintang, it said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/global-it-demand-to-support-asias-economic-growth-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}