SE Asia to grow 4.5% this year, IMF predicts<\/p>\n
BANDAR SERI BEGAWAN (AFP): Southeast Asia's economy should
\nexpand by 4.5 percent this year, the International Monetary Fund
\n(IMF) said Thursday, warning that complacency in sustaining
\nreforms is the biggest risk.<\/p>\n
The IMF, the Asian Development Bank (ADB) and the World Bank
\n-- the institutions which guided many Asian countries after the
\n1997 financial crisis -- said they were optimistic about growth
\nprospects this year in the region ahead of a finance ministers'
\nmeeting here this weekend.<\/p>\n
Kunio Saito, the IMF regional director, said the 10 members of
\nthe Association of Southeast Asian Nations (ASEAN) expanded by an
\naverage 2.5 percent in 1999, many of them swinging back from
\nnegative territory.<\/p>\n
\"We hope that average growth rate for ASEAN will rise to over
\n4.0 percent this year, perhaps 4.5 percent,\" he said.<\/p>\n
Briefing reporters on his report to a meeting of ASEAN finance
\nand central bank deputies ahead of the finance ministers'
\ngathering, Saito said complacency was the \"biggest risk\" yet for
\nthe region.<\/p>\n
\"The economic and financial situation in the region, including
\nASEAN, has improved markedly. The final outcome for 1999 was much
\nbetter than expected,\" he said.<\/p>\n
\"As we underestimated the severity of the crisis, we
\nunderestimated the speed and the strength of the recovery in
\n1999.\"<\/p>\n
The manager of the ADB's regional economic monitoring unit
\nalso briefed the deputies on the Manila-based bank's outlook for
\nthe region on Thursday.<\/p>\n
\"Signs of recovery are very encouraging but there are still
\nareas that have to be reformed,\" Pradumna Rana told AFP,
\nmentioning restructuring in the banking and corporate sectors.<\/p>\n
\"So there should not be any complacency. On the other hand, if
\nreforms are completed, Asia would be back on its higher growth
\npath,\" he said.<\/p>\n
World Bank vice president for East Asia and the Pacific Jemal
\nUd-din Kassum said in an interview with CNN late Wednesday the
\nbank has raised its economic growth forecasts this year for the
\ncountries hardest hit by the crisis, but gave no figures.<\/p>\n
While the rebound was \"impressive\", these countries still
\n\"have a large unfinished reform agenda, particularly in the
\nfinancial and corporate sector,\" he said.<\/p>\n
The IMF's Saito cited external and internal risks to the
\nrecovery.<\/p>\n
The external factors include the performance of the economies
\nof the United States, Japan and Europe, he said.<\/p>\n
Internally, the outlook would depend on how countries adjust
\nmacro-economic policies to sustain the reforms, many of them
\npainful because they include shutting down or restructuring
\nailing banks and corporations owned by businessmen with political
\nconnections.<\/p>\n
The IMF, World Bank and ADB officials noted South Korea's
\nstunning recovery to double digit growth last year but agreed
\nthis has to slow down to avoid overheating.<\/p>\n
They also agreed on the encouraging prospects as Indonesia
\ngrapples with reforms after the election of President Abdurrahman
\nWahid into office.<\/p>\n
\"In my view, the Wahid government is doing so far so good,\"
\nSaito said.<\/p>\n
The World Bank's Jemal said only 13 percent of Indonesia's
\ndebt has been restructured and 78 percent of its banking assets
\nare in the hands of the government.<\/p>\n
But he said the World Bank was \"very comfortable with the
\npolitical leadership and the economic management team.\"<\/p>",
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