Foreign funds crucial to SE Asian recovery: Lee

Foreign funds crucial to SE Asian recovery: Lee

SINGAPORE (AFP): Foreign investment was crucial to sustaining Southeast Asia's economic recovery, Singapore Senior Minister Lee Kuan Yew said in remarks published Monday.

Lee said that except for Singapore, foreign investment in the rest of the region had slowed, and he warned the trend made the rebound from financial crisis vulnerable.

"A word of caution is necessary. Foreign investments into the region, especially to Indonesia, have slowed down appreciably," the Business Times quoted Lee as saying.

"If investment inflows do not increase, this recovery will not be sustained," said Lee, the former Singapore prime minister who is regarded as an elder statesman in the Association of Southeast Asian Nations (ASEAN).

Thailand attracted back only 42 percent of the pre-crisis level investments, while Malaysia and Indonesia received 58 and 59 percent, respectively.

The Philippines recovered 97 percent of its 1996 investment levels.

ASEAN members Indonesia, Malaysia, the Philippines and Thailand, along with East Asian tiger South Korea bore the brunt of the crisis.

The other ASEAN members are Brunei, Cambodia, Laos, Myanmar, Singapore and Vietnam.

Lee said Singapore's immediate neighbors Thailand and Malaysia would regain their bearings in three to five years but investor confidence in Indonesia depended on how soon political stability was restored.

"Sooner rather than later, order must be restored in Indonesia, capital will flow in and workers get jobs. Then confidence will return and things will improve," he said.