SE Asia to rely on external financing<\/p>\n
HONG KONG (Reuter): Southeast Asian economies will rely
\nincreasingly on external financing for growth in the next decade
\nbut some economies could be volatile during periods of
\nuncertainty or speculation, said Janet Henry, an Asia-Pacific
\neconomist with the Economist Intelligence Unit.<\/p>\n
"Indonesia stands greater risk here," Henry told a country-
\nrisk seminar.<\/p>\n
Henry said that as U.S. interest rates fell, Indonesia was at
\nparticular risk of overheating, especially since foreign
\ninvestors parked money there to seek higher returns.<\/p>\n
The flow of hot money into Indonesia could generate
\ninflationary pressures, she said.<\/p>\n
However, Henry pointed out that some Asian economies had taken
\nproactive measures to slow down their rapid growth so as not to
\ntrigger inflationary pressures.<\/p>\n
She singled out Malaysia as showing signs of voluntarily
\nslowing down its double-digit economic growth. "It's slowing
\ndown, it's got to slow down...it's shown itself to be willing to
\ncontrol (capital) inflows," she said.<\/p>\n
But Henry said growth prospects in Indonesia, Thailand,
\nMalaysia and the Philippines continued to be good and massive
\nforeign capital was needed.<\/p>\n
Over the next decade, Indonesia will need US$16 billion in
\nexternal financing, Malaysia and Thailand US$15 billion each and
\nthe Philippines US$7-8 billion, she estimated.<\/p>\n
"Large debt repayment is expected over the next few years,"
\nshe said, adding that government savings in these countries would
\nnot be enough to meet future needs.<\/p>\n
The World Bank estimates that East Asian economies will
\nrequire US$1.5 trillion over the next decade to finance
\ninfrastructure development.<\/p>\n
Henry said there was growing regional cooperation between the
\nsoutheast Asian states, such as in the "growth triangle" of
\nSingapore, Indonesia and Malaysia.<\/p>\n
"Singapore has its surplus current account, Malaysia has the
\nlabor and Indonesia the land," she said.<\/p>\n
But she added it was premature to assume that an economic bloc
\nlike the European Union was being established in Asia.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/se-asia-to-rely-on-external-financing-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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