Economic Forum on Asia to eye stalled growth
Andrea Ricci, Reuters, Hong Kong
Less than two months ago, the World Economic Forum released a preliminary program for its East Asia summit that asked the question, "How deep is the economic downturn in Asia?"
After the Sept.11 attacks on the United States, the answer is clear -- deep enough to change the conference theme to "Asia confronts recession".
"The world has moved from a mere slowdown in IT demand to a broad downturn and now, with the loss of confidence after Sept.11, is experiencing a full-blown recession," said Frank- Jurgen Richter, the forum's Asia director.
The three-day conference of the group, better known for its annual gathering of the world's top business and government leaders in Davos, Switzerland, starts on Monday in Hong Kong.
Security concerns after the attacks on New York and Washington are keeping some U.S. chief executives away -- cancellations include Boeing Co. chairman Phil Condit and New York Stock Exchange CEO Richard Grasso -- but Richter said attendance will still approach last year's level with more than 800 business and government leaders planning to come.
"We're at about 90 percent of our expectations for attendance pre-Sept.11," said WEF spokesman Charles McLean.
"There a sense out there that you can't plan the world's future by e-mail and people need to come together at meetings like this where they need to talk about the issues," he said.
Among those issues will be Asia's role in the U.S.-led war on terrorism. Delegates will try to interpret last week's pledge by leaders of the 21-member Asia Pacific Economic Cooperation (APEC) group to stamp out all forms of terrorist acts.
Key speakers on this topic will be Pakistan's representative to the United Nations, Shamshad Ahmad, and Philippine President Gloria Macapagal Arroyo, whose government is battling Muslim separatists.
But economics remains at the heart of the conference.
Many analysts had been betting on a U.S. recovery in the fourth quarter to give a much-needed fillip to the region, but the attacks are now expected to push the U.S. into a recession that will drag down global growth.
Already, the signs for Asia are not good.
Singapore's economy contracted a harsh 5.6 percent on year in the third quarter and the government expects it to shrink three percent for the year. Taiwan's export orders plunged 27 percent in September and in Hong Kong, some officials are talking about the worst economic conditions since the Korean War.
Keon Lee, deputy head of research at JP Morgan, said Singapore and Taiwan were Asia's worst off economies because they were highly exposed to global demand for technology products.
South Korea, another top exporter of tech goods, was more immune because of its bigger domestic economy. And China and India were partly shielded by their largely closed economies.