E. Asia bounces back from crisis, says WB

E. Asia bounces back from crisis, says WB

WASHINGTON (AFP): East Asia, bouncing back from crippling financial turmoil in 1997, is now the world's fastest growing emerging market, but the 15 million people who fell below the poverty line during the crisis remain impoverished, the World Bank said here Monday.

The findings came in a report released here covering developments in China, Indonesia, South Korea, Malaysia, Thailand, the Philippines and Vietnam, where according to the bank economic growth came to five percent in 1999.

The strongest growth was recorded in South Korea, 10.2 percent, China, 7.1 percent and Malaysia, 4.9 percent.

"East Asia enters the new millennium as the world's fastest growing emerging market -- a remarkable turnaround from the devastating crisis that began in 1997," according to the World Bank.

But the study also found that "the 15 million or so people that the crisis pushed below the poverty line remain unaffected by these improvements."

National economies in Thailand, South Korea and Indonesia went into a tailspin in 1997 as currencies crumbled, investor confidence plummeted and foreign capital fled. For all three countries, the International Monetary Fund arranged rescue packages, to which the World Bank and a number of industrialized countries contributed.

Other countries in the region were also affected but to a lesser extent.

"East Asian economies are clearly on the mend but a good deal of challenging work remains to be done," according to Jean-Michel Severino, bank vice president for East Asia and the Pacific regions.

The report predicted that regional gross domestic product should continue to expand this year at a rate of five percent as exports rise.

But it added that prospects could be threatened if economic reform efforts run out of steam, global interest rates increase, the U.S. expansion falters or the Japanese recovery fades.

The World Bank report was published here as Japan's top economic planner, Taichi Sakaiya warned that the country would suffer negative growth in the last quarter of its fiscal year, which runs to the end of March.

U.S. officials have consistently prodded Japan to reform its markets and take steps to boost growth, thereby enabling it to absorb more exports from fragile economies elsewhere in the region.