Asia recovering faster than expected
Asia recovering faster than expected
TOKYO (AP): Southeast Asian economies are recovering faster
than expected on strong exports of components such as
semiconductors and computers, the Japanese government said
Wednesday.
South Korea and Malaysia have rebounded especially fast
because their economies are geared to supply components for the
Internet-led boom in the U.S. and Japan, the Economic Planning
Agency said in its annual white paper on Asian economies.
The International Monetary Fund is projecting that South
Korea's gross domestic product will grow 8 percent in fiscal
2000, the second year of growth following a 6.7 percent
contraction in 1998.
Malaysia's government expects its economy to grow 5.8 percent,
also a second straight year of growth.
Many business leaders had predicted it would take Asian
economies about five years to recover from a slump prompted by
plunging currencies that began in July 1997.
Some economies continue to lag.
Indonesia's government has said it expects the economy to grow
about 4 percent in fiscal 2000, but warned in May that the weak
rupiah, political instability and legal uncertainty could pull
growth down to 1.5 percent.
To ensure stable long-term growth, the EPA said additional
financial reform is needed throughout the region.
Banks must clear their books of nonperforming loans in order
to resume lending, big industrial combines should be broken up to
stimulate competition and regulations must be eased to allow more
foreign investment, the EPA said.
"Structural reform is indispensable to ensure stable economic
growth, and now is the time to speed up such efforts while
economic recovery continues," said Takashi Sakuma, an official in
the EPA's overseas research division.
He added that Asia must develop its own market for information
technology equipment by improving telecommunications networks and
educating people about the Internet.
"Information technology diffusion throughout the economies is
an important factor to development in the near future," Sakuma
said.