Plenty of unfinished business after Asian crisis eases

Plenty of unfinished business after Asian crisis eases

By Eileen Ng

SINGAPORE (AFP): Regional policymakers and development
specialists are warning there is no guarantee Asia's financial
crisis will not recur despite the return of growth, and are
calling for intensified action on poverty, corruption and
restructuring.

Some 900 million people or about a third of Asia's population
are mired in poverty, many banks and corporations are still in a
fragile state, and graft continues to be a scourge, they told a
high-level forum in Singapore.

Indonesia, hounded by instability, tops the list of
problematic countries while Singapore heads the roster of post-
crisis achievers, said participants at the Asian Development
Forum which ended here last Thursday.

"East Asia is experiencing robust recovery, but there is no
room for complacency," Shin Myoung-Ho, vice president of the
Asian Development Bank, said after a meeting in Singapore last
week assessed the crisis' aftermath.

"It needs to complete the reforms initiated during the crisis
and embark on new ones that offer the best opportunities for
poverty reduction and sustainable development in the era of
globalization and the IT revolution."

Shin urged Asian governments to develop efficient and
adequately funded social "safety nets" for the poor and
vulnerable.

Chia Siow Yue, director of Singapore's Institute of Southeast
Asia Studies, said: "Much work remains to be done on economic and
institutional reform and human resource development.

"In the new environment, the emphasis should not only be on
growth but poverty alleviation and social equity," she added.

Masaru Yoshitomi, dean of the Asian Development Bank
Institute, warned there was no guarantee further economic turmoil
could be avoided and said Asia must build a resilient financial
architecture that can withstand any shocks.

"Because capital market development takes time, further
strengthening of the banking systems through greater
transparency, disclosure and supervision is important in the
short term," he said.

"Asian countries must better manage massive capital inflows."

World Bank Institute vice president Vinod Thomas said
investment in education and knowledge-sharing must be new drivers
of Asian development.

"A knowledge-based economy, one that pays as much attention to
the quality of growth as to quantity, may be the basis of success
for economies of the high-technology future," he said.

Banker Hubert Neiss, a former top IMF official in Asia, said
governments must also contain and defuse rising political
tensions as they tackle economic problems.

"Continued restructuring requires the full rehabilitation of
the financial sector, the restoration of corporate balance sheets
and operational restructuring of corporations to restore their
competitiveness," he said.

Singapore's Finance Minister Richard Hu said reforms were "far
from complete" and warned Asia faces rising competition for
foreign investments from other emerging markets such as Latin
America and eastern Europe.

Mustapa Mohamed, adviser to Malaysia's finance ministry, said
Asia must be more committed to prudent management of the
macroeconomy and external accounts.

"In addition to strong macroeconomic fundamentals, a resilient
and robust financial sector, prudent financial management and
good corporate governance are also essential," he said.

Mustapa said the region's growth system must allow a more
equitable share of wealth as the crisis had worsened poverty.

"We need to get back on track in order to ensure economic
growth, financial stability, the closing of the gap between the
rich and poor, low inflation, higher per capita income and
improved living standards," he said.

The forum also saw calls for a revival of plans for a Asian
Monetary Fund (AMF), proposed by Japan in 1997 to help countries
in crisis and check contagion in the region but shot down by the
United States and Europe.

"It would provide a strong, small, compact, wholly regional
funding organization that would be deeply and constantly engaged
in regional surveillance, East Asian monetary cooperation and
problems on a day-to-day basis," Mustapa said.