Tell ASEAN truth about shakey economic recovery

Tell ASEAN truth about shakey economic recovery

BANGKOK (AFP): Southeast Asians should be told the truth about the region's wobbly recovery from the 1997 financial crisis, which is often glossed over in official statistics, a leading social activist said Friday.

Walden Bello, coordinator of the anti-globalization movement Focus on the Global South, said the recovery remains fragile because it is being powered mainly by higher government spending.

"This is not really an investment-driven growth," he told a symposium here ahead of a ministerial meeting of the Association of Southeast Asian Nations (ASEAN).

In many ASEAN countries, financial systems are still unsound and non-performing loans are high, he said. Heavier government spending, which has led to severe budget deficits, spurred the growth.

"Let me just say that this so-called Asian recovery should be put into perspective," Bello said.

"Unless you have banking systems that are healthy, any sort of recovery that you have will be fragile and that is exactly what you have at this time," he said.

The US economy, which absorbs a bulk of ASEAN exports, is being "deliberately slowed down," and Japan's economy remains sluggish, he said.

"The external stimulus is going to be disappearing very soon ... but the problems remain."

ASEAN members Thailand, Indonesia, Malaysia and the Philippines, along with South Korea, were the hardest hit by the 1997-1998 financial meltdown.

Most analysts however say that while they have some concerns about the region's economic health, it is generally well on its way to recovery.

The other ASEAN members are Brunei, Cambodia, Laos, Myanmar, Singapore and Vietnam.