SARS strikes hardest Asian economics to shoulder<\/p>\n
Karl Malakunas, Agence France-Presse, Singapore<\/p>\n
Asia's economies struggled through the rise of regional terrorism
\nand the war on Iraq but Severe Acute Respiratory Syndrome (SARS)
\nproved to be one crisis too many as it wiped out billions of
\ndollars of business across the region.<\/p>\n
The tourism industry was the highest profile economic
\ncasualty, falling by more than 70 percent in Singapore and Hong
\nKong, while domestic demand crashed in every country touched by
\nSARS as frightened people avoided public places.<\/p>\n
Now that the authorities have declared the SARS crisis is
\nnearing its end, official and private sector forecasts are that
\nAsia's wounded economic tigers can once again scratch and claw
\ntheir way out of the latest crisis.<\/p>\n
Economic research house IDEAglobal has assessed the impact of
\nSARS now that the epidemic is considered under control and
\nbelieves an average 0.9 percentage points will be wiped off
\ngrowth in Asia's nine major regional economies this year,
\nexcluding Japan.<\/p>\n
On the crucial provisos that there is not another outbreak and
\nthe U.S. economy finally kicks into gear, IDEAglobal predicts the
\nregion's economies will pick up close to pre-SARS levels in the
\nfinal three months of this year.<\/p>\n
\"We have made our assumptions on a very bad three months
\n(during the crisis), three more months of poor demand and tourist
\narrivals before things come back,\" IDEAglobal's Asian deputy head
\nof research Nizam Idris told AFP.<\/p>\n
According to IDEAglobal, whose assessments largely tally with
\nother analyst and official forecasts, Singapore and Hong Kong
\nwill suffer the most this year from SARS, with 1.5 percentage
\npoints shaved off their annual growth forecasts.<\/p>\n
Although Malaysia and Thailand avoided any big SARS outbreaks,
\ntheir reliance on tourism also hurt them, slashing their annual
\ngrowth rates by 0.5 and one percentage point respectively.<\/p>\n
Conversely, while more than 80 people have died in Taiwan from
\nSARS, Nizam said their relative lack of reliance on tourism had
\nsheltered it from the economic woes suffered in other parts of
\nAsia.<\/p>\n
IDEAglobal says SARS will take 0.5 percentage points off
\nTaiwan's economic growth this year, although the Taipei
\ngovernment is more pessimistic, forecasting 2.89 percent annual
\ngrowth, down from a 3.68 percent prediction made in February.<\/p>\n
While Taiwan is less concerned with tourism, the government
\npredicts export orders in the second quarter will fall 2.9
\npercent, costing US$1.09 billion.<\/p>\n
Vietnam, which was one of the first nations hit by SARS but
\nalso the first to contain it, recorded a 54 percent drop in
\ntourist numbers in May.<\/p>\n
However, official figures there showed GDP growth in the first
\nfive months of this year was still around seven percent thanks to
\ngrowth in exports and industrial output.<\/p>\n
In China, where more than 340 people have died, IDEAglobal
\npredicts the economy will grow 7.5 percent, also 0.5 percentage
\npoints less than pre-SARS forecasts, with the sheer size of the
\nnation and its economy offering some buffer.<\/p>\n
China recorded a trade surplus of $2.38 billion in the first
\nfive months of this year, with total foreign trade up 39.6
\npercent year-on-year to $309 billion.<\/p>\n
Across the nine economies excluding Japan, IDEAglobal's
\nassessment is that the region's growth rate will be 3.7 percent
\nthis year, compared with a forecast of 4.6 percent before the
\ncrisis.<\/p>\n
Similarly, the Economist Intelligence Unit believes that over
\nthe next four years, Asian economies outside Japan will grow an
\naverage 5.6 percent, with SARS likely to have minimal long-term
\nimpact.<\/p>\n
Nizam agreed with other analyses that the epidemic may have
\ncost Asian economies as much as $30 billion, although he said it
\nwas impossible to give an exact figure because of the difficulty
\nin assessing the impact of SARS on domestic consumption.<\/p>\n
\"Hong Kong has a $9.9 billion (annual) tourism industry ... if
\nyou take away a quarter of that for a halving of the market in
\nquarters two and three, that's (a loss of) $2.5 billion already,\"
\nhe said.<\/p>\n
\"In Singapore there is a five billion dollar market so they
\nhave lost 1.25 billion.<\/p>\n
\"If you work along those lines, you can come up with a line of
\n$20 to $30 billion.\"<\/p>\n
Nizam said the impact of SARS on Asia's economies was
\nmagnified because it followed the Sept. 11, 2001, terrorist
\nattacks on the United States, last year's October bomb blasts in
\nBali, Indonesia, and this year's U.S.-led war on Iraq.<\/p>\n
\"Because the problems have come one after another, the impacts
\non consumer confidence and the economy in general were greater.
\nPeople were losing jobs before SARS,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sars-strikes-hardest-asian-economics-to-shoulder-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}