Indonesia still vulnerable to external shocks: ADB<\/p>\n
MANILA (AP): The president of the Manila-based Asian
\nDevelopment Bank Tadao Chino said here on Wednesday that
\nIndonesia remains vulnerable to external shocks because of its
\ndependence on oil exports and trade within the region.<\/p>\n
"On the domestic front," he said, "a major uncertainty is the
\nrecovery of private-sector demand, which will in turn be
\ninfluenced by perceptions over banking and corporate sector
\nreforms."<\/p>\n
Chino noted that bad loans in Indonesia's banking system
\nremain high and that while progress has been made in corporate
\nrestructuring, much remains to be done.<\/p>\n
ADB says that the economic recovery in the Asian region is
\nrecovering more rapidly than expected from its financial crisis.<\/p>\n
The Manila-based bank plans to announce later this month that
\nit expects developing countries in Asia will grow by an average
\nof more than 6 percent this year, President Tadao Chino said.<\/p>\n
The ADB originally forecast 5.1 percent growth this year for
\nthe region, excluding Japan, and raised that to 5.7 percent last
\nNovember.<\/p>\n
"The recovery has been more robust than we forecast before,"
\nChino said in an interview with The Associated Press.<\/p>\n
He said government policies across Southeast Asia have helped
\ndomestic demand grow, while economic reforms have "strengthened
\ninvestor confidence in the region so more funds have been flowing
\nin."<\/p>\n
The ADB, however, remains concerned about the progress of
\nreforms in some countries including Indonesia, Chino said.<\/p>\n
He indicated the ADB is also concerned over the slow pace of
\ncorporate restructuring in Thailand, which has so far mainly
\ntaken the form of voluntary negotiations and out-of-court
\nsettlements.<\/p>\n
For Hong Kong, South Korea, Singapore and Taiwan, the ADB is
\nforecasting aggregate growth this year of 6 percent to 7 percent,
\nconsiderably higher than an earlier estimate of 5.2 percent.
\nGrowth in China this year is expected at 6.5 percent, up from an
\nearlier estimate of 6 percent.<\/p>\n
For the Philippines, however, Chino appeared rather less
\nbullish, forecasting growth of "around" 4 percent in both 2000
\nand 2001. The ADB earlier forecast growth of 4.5 percent this
\nyear.<\/p>\n
Chino said that there may be a role for a new Asian monetary
\nfund to help countries hit by financial problems, but the
\nInternational Monetary Fund should continue to take the lead in
\nresponding to future crises.<\/p>\n
"I think the concept (of an Asian fund) is one of the ideas
\nwhich Asian countries could consider over the medium term," he
\nadded.<\/p>\n
"But I believe the IMF should be the lead agency for handling
\nliquidity crises," Chino added.<\/p>",
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