Asia needs to keep crisis lessons in mind: ADB

Asia needs to keep crisis lessons in mind: ADB

CHIANG MAI, Thailand (Agencies): Asian countries need to keep
the painful lessons of economic upheaval in mind to avoid a
devastating new blow from the increasingly globalized economy,
the president of the Asian Development Bank warned Saturday.

Tadao Chino opened the Manila-based bank's annual meeting with
an appeal to Asian governments - who saw the regional economy
recover with 6.4 percent growth last year after shrinking 7.7
percent in 1998 - to avoid complacency now that the Asian
financial crisis seems past.

"Asia must not revert to business as usual, taking the crisis
as simply a short-term aberration," Chino told an audience
including finance ministers and central bankers from around the
region.

Asia risks a new shock, which would hit hardest the 900
million people living in dire poverty, unless it speeds up
corporate and financial reforms that would improve governance and
reduce corruption, Chino said.

Chino said that countries without sound policies and
institutional capacities were more vulnerable to the "social and
economic stresses as well as financial volatility" generated by
the globalizing economy.

"Globalization presents developing economies with enormous
opportunities, but it also poses risks that have to be managed,"
he said.

The benefits include increased access to foreign markets for
developing countries, which can increase inflows of capital,
technological and managerial know-how, raising employment and
productivity, he said.

Thai Prime Minister Chuan Leekpai, who has pushed through a
radical program of economic reforms, warned that the only way to
avoid a repeat of the crisis was to tackle fundamental weaknesses
in Asian economies.

"We must not become complacent, nor be locked into a false
sense of security," he said. "The East Asian financial crisis
will go down in history as ... a wake up call for several
countries."

Chuan pledged that Thailand, where the 1997 crisis erupted,
would not stint in its drive for economic reform, and said it was
"critical" that other Asian governments also promoted a reform
agenda.

Delegates at the three-day conference were expected to discuss
a range of measures aimed at improving living standards in Asia
and an expansion of the bank's soft-loan facility.

The comments were in line with the Asian Development Bank
annual report issued in Bangkok last month, which said that
although Asia remained the world's fastest growing region, it
still faced systemic risks.

Crisis-hit countries have spent the last few years overhauling
corruption-riddled and inefficient financial systems which
collapsed when speculators saw an easy victim in Asian currencies
in 1997.