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.