Asian stablity worries overdone, economic problems real: Report
Asian stablity worries overdone, economic problems real: Report
Agence France-Presse, Singapore
Worries about political instability in Asia in the aftermath of the global terrorism crisis have been overblown, but economic troubles are real and growing, a Standard Chartered Bank report said Friday.
The events following the Sept. 11 terrorist attacks on the United States have raised caution among investors worldwide, adding further burden to Asia's already weak economies, it said.
"The impression given a few weeks ago was that countries like Malaysia and Indonesia were encountering serious disturbances," said Gerard Lyons, the bank's head of global markets research, referring to widely publicized anti-U.S. demonstrations by hardline Islamic protesters in Jakarta and rumblings of rising Islamic extremism in Kuala Lumpur.
"Nothing could have been further from the truth. Cities like Kuala Lumpur and Jakarta were relatively peaceful," Lyons said in the report written after a tour through the region.
But he said there was "much unease" about the US-led bombing strikes against suspected terrorist targets in Afghanistan.
The unease was "clearly important and the situation (in the region) could always change," he said. On Thursday, an Indonesian Islamic scholar said Muslim hardliners in Indonesia may gain wide publicity but in reality they are a small group who do not pose a real threat.
Azyumardi Azra, president of the State University for Islamic Studies, said at a seminar in Singapore that "this hardline kind of political Islam has very little prospect in Indonesia" where majority of Muslims are moderates.
Lyons said that a clear implication of the events after Sept. 11 was the "heightened risk aversion" among global investors.
But he stressed it would be wrong to blame the cautious approach to Asia solely on the post-Sept. 11 developments.
"A key problem is the weakness of the Asian economies," he said, highlighting the export-dependent economies of Hong Kong, Singapore and Malaysia.
While the export slack has hit hurt Singapore and Malaysia, which are largely dependent on the U.S. market, Hong Kong's rising exposure to China has so far shielded it from the impact of the slowing U.S. economy, he said.