Rich man's club catches a cold as Asia sneezes

Businessmen in this part of the world have long had a saying that reflects the region's dependence on exports: When the industrialized world sneezes, Asia catches a cold.

But the latest prognosis is that industrialized nations in the Organization for Economic Cooperation and Development (OECD) may be in for a severe cold themselves. And they may catch it from Asia.

Back in the 1980s, the OECD was often referred to as a rich man's club. Club meetings in those days frequently were occasions for backslapping as members routinely predicted that the economies of the wealthy states would continue to grow. But not this year. The OECD, in a key economic forecast, predicts that the current turmoil in Asian markets could cut growth in the world's major developed economies by as much as one percentage point. It says Japan's economy is stuck in a rut, and few can tell from one day to the next what is happening to its beleaguered Asian neighbors.

Only those who prefer to take a myopic view of Asia's economic future will continue to talk about rosy days ahead. And the OECD has bluntly acknowledged the gravity of the regional economic situation by noting that it will be some time before the Asian Tigers recover their former high growth rates. The various segments that make up the OECD's latest annual report are screeds of almost unrelieved gloom. This region, it seems, faces another tough year in 1998, with only the slightest glimmer of better things to come.

For Asia, the report says, the stakes are high and the prospects grim. But the countries of the developed world have no cause for backslapping this year. In the industrialized nations, where the stakes are equally high, the danger signals are beginning to flash already.

-- The Hong Kong Standard