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.