SARS, Iraq war threaten region's economy: UN<\/p>\n
Zakki Hakim, The Jakarta Post, Jakarta<\/p>\n
The outbreak of SARS and the negative effect of the recent war
\nin Iraq could become a serious threat to economies in the region,
\nthe UN Economic and Social Commission for Asia and the Pacific
\n(UNESCAP) said, while presenting its latest regional economic
\nsurvey on Thursday.<\/p>\n
For Indonesia, economic growth this year was projected to slow
\ndown to around 3.4 percent, from 3.6 percent last year.<\/p>\n
The results of the survey were drafted in January and
\nFebruary, when neither war in Iraq nor the deadly Severe Acute
\nRespiratory Syndrome (SARS) had occurred. UNESCAP initially
\nprojected the Indonesian economy to grow more, by 4.1 percent
\nthis year, compared with the government's projection of 4
\npercent.<\/p>\n
But the war and SARS could pose significant downside risks for
\nthe economies in Asia and the Pacific, UNESCAP said.<\/p>\n
\"At the beginning of the year, prospects for 2003 were that
\ngross domestic product (GDP) growth would be sustained, perhaps
\neven with some marginal improvement over 2002. However, the war
\nin Iraq, SARS and lower growth in the developed economies pose
\nsignificant downside risks,\" it said in a media statement.<\/p>\n
\"The most obvious and serious risk is what happens in the
\naftermath of military action in Iraq,\" the UN said, pointing out
\nthat although the war had come to an end and its impact on Iraq's
\noil industry was minimal, \"its political and security impact on
\nthe Middle East could be more long-lasting.<\/p>\n
\"The global economy, too, has been adversely affected by the
\nuncertainty leading up to the war. This is unlikely to be
\nreversed immediately upon the cessation of hostilities,\" it said.<\/p>\n
A prolonged economic slowdown in the U.S., Japan and other
\ndeveloped economies would hurt exports from developing countries
\nin the region and undermine business confidence.<\/p>\n
On the impact of SARS, UNESCAP said that it was too early to
\npredict as it could extend into the second quarter of 2003.<\/p>\n
It said that, at the moment, the tourism, travel, hotel and
\nretail industries were seen as the most badly affected by the
\ndisease but, \"If SARS persists for a long time, its impact will
\nthen extend beyond these sectors into actual production declines
\nand job losses in sectors other than travel and hotels.\"<\/p>\n
It added that at the moment the countries deemed to be badly
\naffected by SARS were China (including Hong Kong), Singapore and
\nThailand, whose economies have large a tourism sector. The
\nimpact on Indonesia and Malaysia is seen as limited at this
\nstage.<\/p>\n
\"If the spread of the disease is contained by June 2003, there
\nexists, however, the possibility of a significant bounce-back in
\nthe third and fourth quarters of 2003 in the regional economy.<\/p>\n
\"The shock effect will wear off eventually and consumers will
\ntend to spend more than they might have done otherwise. In that
\nevent the impact on output growth in 2003 could be very small.\"<\/p>\n
UNESCAP said that, amid the various uncertainties, governments
\nhad to strive to sustain GDP growth by maintaining the momentum
\nof structural reform and commitment to trade liberalization, and
\ntake measures to enhance productivity and competitiveness.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sars-iraq-war-threaten-regions-economy-un-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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