'Asian recession different than '97'
'Asian recession different than '97'
Agence France Presse, Hong Kong
Economic growth in the Asia-Pacific region, excluding China,
will plunge to 1-2 percent this year due to the global slowdown
and in the wake of the terrorist attacks on the U.S., the IMF
said Monday.
Speaking at the World Economic Forum's three-day East Asia
Economic Summit, International Monetary Fund deputy managing
director Shigemitsu Sugisaki added the IMF had US$50 billion
available to help countries cope with the slowdown.
"Our estimate is, that excluding China, growth in the region
is forecast to fall from about 6.5 percent last year down to 1-2
percent this year, so something like a five percentage points
decline. That's huge," he told delegates attending the forum.
However, the region would only see a slight recovery in
economic growth to 2-3 percent in 2002, he added.
The weakest growth would be seen in Singapore, Taiwan and Hong
Kong while the slowdown in other less open nations, namely
Philippines, Indonesia and Malaysia was expected to be less
pronounced.
"China is the exception in that it will continue to grow
around 7 percent," he said.
Sugisaki said although there was limited scope for
macroeconomic policy action in Japan, it "must now resume its
leadership role in Asia."
Japan could achieve this through decisive action to reform the
banking and corporate sectors.
"Resolving the debt issues is really the only way in which to
revive the long-term growth prospects," he said.
Although the recovery of East Asian economies was dependent on
the global recovery, it did not mean regional countries did not
need to take any action themselves, he said.
"(On the) macroeconomic policy front, those with low inflation
and a flexible exchange rate -- Singapore, Thailand and Korea --
have more scope to ease monetary policy than those with a fixed
exchanged rate."
He called on governments around the region to refrain from the
temptation of abandoning structural reform programs in light of
the economic slowdown.
"In an environment where markets have a low tolerance for weak
markets, structural reforms will serve to build confidence and
will help the countries in this region distinguish themselves
from other emerging markets," he said.
He said the IMF had stepped up its surveillance activities on
countries around the region and "we are also ready to give more
financial assistance to countries that are trying implement good
policies in the more difficult circumstances.
"I can report to you the IMF has comfortable resources to do
so.
The size of the resources available for further assistance is
in the order of $50 billion in the near term.
"Hopefully, these resources can be used to prevent crisis
rather than to manage crisis," he said.