Economic Forum quells fears on Asian recovery

Economic Forum quells fears on Asian recovery

SINGAPORE (AFP): The influential World Economic Forum on
Friday dismissed fears Asia's crisis-hit economies were
recovering too fast for their own good, saying the quick rebound
would give a political push to reforms.

Forum managing director Claude Smadja said there had been much
doubt among foreign investors about the quick pace of recovery in
Asia which had plunged into recession from a financial crisis
that erupted in mid-1997.

The doubts stemmed from the slow pace of restructuring of the
region's badly-hit corporate sector.

"Let me be very blunt about it. I will not shed any crocodile
tear about the fact that the recovery is coming too soon and too
fast and in some respect too bad because the restructuring
process might be hampered and stopped.

"(This is) because, quite simply, I don't believe in the
concept of redemption through pain," Smadja told a news
conference ahead of the Forum's three-day East Asia economic
conference here beginning Monday.

The Geneva-based World Economic Forum issues annually the
widely-followed Global Competitiveness Report and holds its
biggest annual gathering of top political and business leaders
and academics in January in Davos, Switzerland.

Smadja said the fact that Asia's recovery was coming sooner
than expected would be a boost for the restructuring process
"because it will make lot of very difficult restructuring moves a
little bit easier politically."

He pointed out that with economic recovery, "relocation of
workers, readjustments inside corporations and policy moves can
become a little bit easier."

Smadja said no one should expect Asia's restructuring process
to take place in just one go and added that it would be even
unfair to set a time limit for the reforms.

"We have to be very clear. What is required today from the
region is not comparable to the charge of the light cavalry. It
doesn't happen at once.

"What we are seeing in the region is a very complex, delicate
long-term process of restructuring. So I think it would be
foolish and childish to expect that this would happen over 12 or
15 months.

"This is a process which by definition will happen on a kind
of two steps ahead, one step backward and one step on the
sideline. So I think we have to be very clear in putting the
recovery in perspective in respect to the restructuring process
which has to go on," he explained.

Smadja said the region must press on with banking and
financial reforms and adoption of "software" for globalization,
including legal institutional regulatory frameworks.

He admitted that political uncertainty in Indonesia, which
holds its presidential elections next week, would bear on
economic prospects in the region but pointed out that the nation
was still on course to achieving positive economic growth this
year.

The Singapore conference with the theme "New Asia, New Era:
Co-creating the Opportunities" would try to establish a country-
by-country scorecard for the region on the pace of restructuring
following the crisis, he said.

He added that the message from the conference would be "that
East Asia is back, and quite solidly back, despite all the
question marks and the uncertainties."

Smadja said the mood at the conference here last year was
filled with concerns that crisis-hit Asia would take about five
to 10 years to emerge from the crisis.

"There are a number of people who had rushed into judgments
and decided that the Asian miracle has been an Asian mirage.
Events have proved that this was a case of conceptual myopia," he
said.

Thailand's Prime Minister Chuan Leekpai, Malaysian Prime
Minister Mahathir Mohamad and Singapore Premier Goh Chok Tong as
well as senior government leaders, business leaders, analysts and
economists from the region will participate in the conference.