S'pore recession blows ill wind through Asia<\/p>\n
SINGAPORE (AFP): The winds of recession in Singapore are
\nblowing dark clouds across Asia, with analysts saying a reliance
\non exports has left the region vulnerable in the face of the US-
\nled global slowdown.<\/p>\n
Although most countries may escape the stigma of being tagged
\n\"in recession\" growth targets are being slashed close to zero.<\/p>\n
Analysts believe that with the exception of China, Asian
\ncountries will find it difficult to escape year-on-year negative
\ngrowth.<\/p>\n
\"With the economies of Japan, Euroland and other emerging
\nmarkets similarly floundering, Asia's export-led economies will
\nalso face challenges in locating alternative sources of external
\ndemand,\" said Standard Chartered strategist John Tan.<\/p>\n
Japan, the Philippines, South Korea and Taiwan, like
\nSingapore, were particularly exposed either all or in part to
\ntumbling demand for electronics.<\/p>\n
As finance ministers throughout Asia wrestle with their growth
\nforecasts, revising them down, Taiwan has already admitted to
\nbeing in danger of joining Singapore in recession.<\/p>\n
\"Taiwan's situation is very worrisome,\" says Chen Poh-chih who
\nchairs the Council for Economic Planning and Development.<\/p>\n
The Asian Development Bank says South Korea and Malaysia \"are
\nlikely to see the sharpest slowdowns\" in East Asia, although
\nMalaysian Prime Minister Mahathir Mohamad has rejected the
\nprospect of recession by its official definition.<\/p>\n
The Asian problem this time ironically stems from the cure for
\nthe 1997-98 financial meltdown. Then, the United States was the
\nshining knight who came to the rescue offering an export haven.<\/p>\n
Four years on, the United States is ailing and Asia is
\nsuffering from becoming over reliant on the US market,
\nparticularly its technology needs.<\/p>\n
\"An unfortunate by-product of Asia's recent crisis is that
\nmany of the region's economies have become more dependent on
\nexport-led growth, with the US as the favored target destination,
\nin lieu of undertaking concrete economic reforms and
\nrestructuring to rebuild solid foundations for domestic demand
\ngrowth,\" said Tan.<\/p>\n
\"Although the US underwrote Asia's 'V-shaped' recovery in
\n1999, the present decline in the US IT sector is exporting
\nrecessionary forces to the region in the form of collapsing
\nexports.\"<\/p>\n
Thailand and Hong Kong have been quick to distance themselves
\nfrom Singapore's woes which are seeded in an economy where the
\nelectronics sector contributes to more than half of manufacturing
\noutput, and manufacturing activity accounts for 22 percent of
\nSingapore's gross domestic product.<\/p>\n
Thai Prime Minister Thaksin Shinawatra has ruled out recession
\nsaying Bangkok \"is not so concentrated on IT exports, and we have
\nrestructured our economic base to focus on the grassroot
\neconomy.\"<\/p>\n
Hong Kong financial secretary Antony Leung said his economy
\ndid not rely on the same exports as Singapore and hence it has
\nbeen \"less affected\" by the slowdown in the technology sector.<\/p>\n
But neither Thaksin or Leung could deny their economies are
\nhurting.<\/p>",
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