Regional crisis worse than thought: PM Goh

Regional crisis worse than thought: PM Goh

SINGAPORE (Dow Jones): Singapore Prime Minister Goh Chok Tong yesterday warned that the region's economic crisis is worse than initially believed and called on Japan to do more to stimulate its sputtering economy.

"The region is in deeper recession than earlier thought," Goh told a dinner audience from the Development Bank of Singapore Ltd., one of the city-state's big four banks. "How much longer the turmoil will last or how much worse it will get before it gets better, no one knows for certain."

The prime minister, who said earlier this month that the chances of a recession in Singapore are "fairly high," told the bankers that Southeast Asia faces the "twin threats of recession and inflation."

The Singapore prime minister said the general weakness of the Japanese yen and the "poor performance" of the country's economy has added to the region's misery.

Without addressing directly the change of leadership in Japan, Goh said, "Japan has taken decisive steps to deal with its banking problems, stimulate its economy in the near term and restructure over the medium term. But it needs to do more to turn the economy around."

Touring the region rhetorically, he said Indonesia faces the prospect of "a sharp contraction", while Thailand and South Korea "are by no means out of the woods" because their debt burdens remain high.

"Malaysia," he continued, "is looking for funds to rescue its bank and debt-ridden corporations."

Singapore, an island of about 3.1 million people, is sandwiched between the much larger countries of Malaysia and Indonesia.

In admonishing domestic critics who say the government hasn't done enough to address the crisis, Goh reiterated that the problem in Singapore is caused by external shocks over which Singapore has little control.