Australian exporters warned of SE Asian instability

Australian exporters warned of SE Asian instability

CANBERRA (AP): Political and economic instability in Southeast
Asia is making the region more precarious for Australian
exporters, a government agency warned on Monday.

The Export Finance and Insurance Corporation, which provides
export insurance for Australian companies, said the weaker U.S.
economy, signs of slowing global growth and the likelihood of
falling commodity prices increased the risk of problems in Asia.

At the same time, political volatility in some countries is
compounding economic risks.

"Emerging market event risk is on the rise, with the recent
liquidity crisis in Turkey adding that country to a list of
hotspots that already included Argentina and much of emerging
Asia," said EFIC senior economist, Mark Thirlwell in a research
note.

"All told, the risk of another emerging markets crisis is on
the rise."

EFIC's head of credit, John Collins said banks are becoming
less willing to underwrite exporters in the region.

"Increasingly we operate in partnership with banks, where the
banks might not underwrite all of the risks of a transaction and
we would look to take the top-up portion, whatever is necessary
to keep Australia's exports moving, and yes, we have seen an
increase in demand," Collins said.

EFIC said high oil prices are putting more pressure on foreign
debt burdens especially for the Philippines, Korea, and Thailand.

The slide in microchip prices throughout last year, together
with the slumping U.S. NASDAQ stock market, has raised fears
about a downturn in the global electronics industry.

"With many Asian economies heavily dependent upon electronics
exports, that would represent a substantial setback for the
region's growth prospects," Thirwell's report said.

Thirlwell told The Associated Press that although recent
interest rate cuts by the U.S. Federal Reserve might ease some of
the economic risks, political volatility, particularly in
Indonesia and the Philippines, remain the greatest risks for
Australian companies.

Thirlwell and Collins emphasized that although the region was
becoming more precarious, each country head to be assessed
individually.

"There are so many different risks throughout Asia, the
general advice we would give is know your buyer and know your
market, in Asia particularly that is true," Collins said.

Due to a combination of both political and economic problems,
Indonesia and the Philippines remained the major risks for
Australian exporters, they said.