IMF tells SE Asia to keep up reforms to buffer economies

IMF tells SE Asia to keep up reforms to buffer economies

KUALA LUMPUR (AP): As gloom spreads across Southeast Asia
about slowdowns in its two biggest export markets, an
International Monetary Fund official on Thursday urged regional
governments to continue to reform their corporate and financial
sectors to buffer their economies.

Kunio Saito, the IMF's director of the Asia-Pacific region,
said that while growth was slowing globally, economies in
Southeast Asia were still expanding "at a very respectable rate"
and many forecasters were predicting a return to better
conditions by year's end.

"Of course, compared with last year there is still a
slowdown," Saito told reporters after addressing Southeast Asian
economic and finance officials at a meeting in Kuala Lumpur.

"But I don't think this is a case one should get overly
excited about. Most of us a projecting some pickup toward the end
of this year.

"The important thing is to move ahead with the various
policies," he said. "I think in this part of the world, this
(means) restructuring corporate and financial sectors."

Saito was among officials of the IMF, the World Bank and the
Asia Development Bank who briefed government and central bank
officials from the 10-country Association of Southeast Asian
Nations grouping on Thursday.

The briefing, which Saito described as being on the "global
and regional economic outlook and policy challenges the region
faces," comes ahead of a weekend meeting of ASEAN finance
ministers as well as those from Japan, China and South Korea.

Juanita d. Amatong, an under-secretary of the Philippines
department of finance, said after the briefing that Southeast
Asian countries were worried about the effects of slowdowns in
the U.S. and Japan.

The U.S. financial downturn and new weakness in Japan are
expected to top the agenda at the ministers meeting, which begins
Saturday. The U.S. and Japan are Southeast Asia's biggest trading
partners, and the strong U.S. economy helped countries such as
Malaysia recover from the 1997-98 Asian financial crisis by
buying its electronic goods.

Multibillion-dollar IMF and World Bank bailout packages for
countries worst hit by the crisis - including Thailand, Indonesia
and South Korea - emphasized economic, banking and corporate
reform.

In a report published in late March, the World Bank predicted
that Asian economies would be hurt this year by weak U.S. demand
for imports, but would keep growing because of reforms begun
after the financial crisis.

China would be the best performer in Asia, although last
year's 8 percent growth would fall to 7.3 percent, the bank
predicted.

The sharpest fall in growth would be in South Korea, from 8.8
percent last year to 4.5 percent this year, the bank said.

Overall growth for Indonesia, Philippines, South Korea,
Malaysia and Thailand would fall to 4 percent this year from 7.1
percent last year.

Especially hard-hit will be electronics exporters such as
South Korea and Malaysia. Malaysia's government revised down its
forecast for gross domestic product growth to around 6 percent
from a late-October forecast of 7 percent economic growth this
year.