Asians seek crisis cures at ADB meeting

Asians seek crisis cures at ADB meeting

GENEVA (Reuters): Financial officials from 56 Asian countries, gathering for the annual meeting of the Asian Development Bank, are looking for ways out of the region's economic crisis.

The onus is likely to fall on Japan.

Jungsoo Lee, chief economist at the ADB, said that if growth were to slow in Japan, it ..."will have a very serious impact on other Asian countries, particularly because Japan is a major investor and trading partner for Asia".

Lee, speaking to Reuters on the sidelines of the meeting, said he was confident that things would improve.

"I have confidence that at least Japan understands the problem and is trying to resolve the problem. That is a good sign for Asia".

Those countries sending delegates to Geneva include Thailand, South Korea and Indonesia, all hard hit by the crisis. The ADB has forecast negative growth in all three former Asian tiger nations this year.

Growth elsewhere in the region is expected to slow, with even China's growth expected to drop from the 8.8 percent rise it saw in 1997 to closer to 7.0 percent.

Problems have been compounded by weakness in Japan's economy. Japanese finance minister Hikaru Matsunaga, due to attend the meeting, instead will stay at home to attend parliamentary sessions, after the country last week passed a 16.65 trillion yen (US$128 billion) stimulus package.

Matsunaga is also seeking to deal with disciplinary measures after the Japanese government found 112 finance ministry staff had received over-lavish entertainment from financial firms, part of a broader corruption scandal.

Japan will instead be represented at the ADB by Eisuke Sakakibara, vice-minister for international affairs at Japan's ministry of finance. Sakakibara, dubbed "Mr. Yen" by financial markets, will head a delegation of roughly 30 officials.

Sakakibara said on Monday in Tokyo that the yen could strengthen "somewhere over the next six to nine months".

Some experts fear that unless Japan makes good on efforts to cure its domestic ills, the yen could face a severe test by speculators bent on selling it.

Other countries face crucial problems: Indonesia is battling to stabilize its currency while its government tries to quell protests by students opposing President Soeharto. Worries about rising unemployment and higher prices for some staples have fueled such unrest.

Fires in Indonesia's Borneo province of East Kalimantan have forced schools to close in Brunei, which shares the island with Indonesia and Malaysia. Smoke from the fires has also drifted over to Singapore.

But despite problems, there are notes of optimism for Asia.

Goran Lindahl, chief executive of global Swedish-Swiss-based electrical engineering group ABB Asea Brown Boveri Ltd. said he remained confident for the region, especially China.

"The third millennium will happen in Asia," Lindahl said at the start of seminars being held alongside the ADB conference which will be opened formally by Swiss President Flavio Cotti today.