Asia can sustain recovery: Former leaders

Asia can sustain recovery: Former leaders

TOKYO (AFP): Asia can sustain its recovery from the financial crisis which erupted in July 1997 but must be wary of another outbreak, according to two key policymakers of the time.

"Like a man who has suffered a heart attack, post-crisis East Asia has had intimations of mortality," former Philippine president Fidel Ramos told a symposium here.

"It has learned ... that while development is possible, it is not inevitable," said the former leader, who handed over to President Joseph Estrada when his term expired in 1998.

Former Indonesian economy and finance minister Ginandjar Kartasasmita, agreed.

"While I believe that the region's recovery is still fragile and that more needs to be done to solidify its foundations, I am strongly convinced that it is real and sustainable," he said. "Recovery is there for the taking."

He estimated real gross domestic product growth in 1999 of 9 percent in South Korea, about 4 percent in Thailand, slightly more than 2 percent in Malaysia and the Philippines and 0.2 percent in Indonesia.

"Korea, Thailand, Malaysia and the Philippines therefore seem to be well along the road to recovery, while Indonesia is still struggling," said Ginandjar.

"But even in Indonesia, slow recovery does not mean no recovery," he told the symposium on Asian recovery organized by the Japan External Trade Organization.

Ramos, the keynote speaker to the symposium, said East Asia would set the pace for other developing regions for two key reasons. Its high investment rates are geared to exports and it has been strengthened by the crisis.

The former Philippine leader said exports were hauling the region into better times, warning however that the days were numbered for the Asian philosophy of "export or die."

There were four key stages to sustainable recovery: the end of panic, debt resolution, good corporate governance and raising long-term competitiveness, he said.

After the crisis, neither globalization nor democratization held the same allure for Asia, said Ramos.

"Today's East Asians are more aware than they were of the downside of globalization -- of the havoc it can cause on traditional customs and of the social injustice that free-ranging capitalism can impose on poor people," he said.

"They have come to realize that globalization will not bring about general progress automatically. Indeed globalization, at least initially, may sharpen inequalities between the mature and less-developed countries and also the socio-economic gaps between national societies."

Sweeping away authoritarian regimes, as East Asia had done in South Korea, Taiwan, the Philippines, Thailand and Indonesia, "may turn out to have been the relatively easy part," said Ramos.

"Making democracy work, I see as Asia's biggest challenge over the next 20 years."

From the corporate sector, Nobuo Tateishi, chairman of major control device and electronic parts maker Omron Corp., said Asia's recovery was supported by exports to strong U.S. markets.

"But the economic structures of Asian countries have not been reformed drastically and they are not yet in a new kind of growth spiral," Tateishi warned.