ASEAN members risk marginalization: WB economist

ASEAN members risk marginalization: WB economist

Agence France-Presse, Manila

Several major Southeast Asian countries risk being
marginalized unless their economic reforms keep pace with their
neighbors, World Bank regional chief economist Homi Kharas said
here Tuesday.

While many East Asian nations had committed themselves to such
reforms, they often ran into obstacles such as vested interests
and disagreements among policy-makers which made implementation
uneven, Kharas told AFP on the sidelines of a poverty forum.

He warned that countries delaying the reforms would "just
simply become marginalized."

He cited the case of Myanmar "which has not engaged in reforms
for decades and which is marginal to the region as a whole,"
despite its large population and rich natural resources.

China and Vietnam "are pursuing reforms (and) will continue to
make progress and if other countries in the region don't keep
pace, they will slowly become more marginalized from the
perspective of the international financial community," Kharas
said.

Indonesia, the Philippines and Thailand, which were all hurt
by the 1997 Asian financial crisis, were still "fragile" and in
danger of being marginalized, he said.

Many of the Southeast Asian nations hit by the 1997 crisis had
failed to fully address the weaknesses that were exposed and had
slowed down the pace of reform once their economies showed signs
of recovering, he said.

"There is still a residue of tremendous unfinished business,"
Kharas warned.

The crisis, caused by tumbling currencies, pushed the
economies in the region to their worst recession in decades.

Smaller economies such as Laos, Cambodia and Papua New Guinea
could also be left behind, Kharas warned.

In contrast, Malaysia "has been more successful in pushing
through with restructuring," he said, remarking that Kuala Lumpur
had swiftly established new agencies to carry out key measures
shortly after the crisis hit.

"Malaysia also starts from a position of having perhaps better
developed institutions than other countries in the region,"
Kharas said.

Kharas said there was a relatively small window of opportunity
for implementing reforms before political campaigning for key
elections begins in some Southeast Asian countries, effectively
slowing down reform measures.

"Many governments in the region have laid out an agenda of
policy reform. We now hope in the next 12 months, we will
actually see them implementing that agenda," Kharas said.