Terrorism, war, AIDS threaten Asian growth

Terrorism, war, AIDS threaten Asian growth

Agencies, Kuala Lumpur

Terrorism, war and AIDS threaten Asia's growth prospects, a World Economic Forum summit heard Monday.

Government and corporate delegates at the East Asia Economic Summit here said a prolonged U.S.-led war in Iraq could hurt the region's economic recovery.

Australian Foreign Minister Alexander Downer, whose government is a staunch supporter of the U.S. in its showdown with Iraq, said "if the war is over fast it is okay" but a protracted war would push oil prices up.

Malaysia's Trade Minister Rafidah Aziz said the threat of war was hampering the World Trade Organization (WTO) talks targeted for completion by the end of 2004.

"With a looming war over our head... people are now much more cautious about market opening," she said.

Rajesh Narasimhan, vice president of Singapore-based consulting firm Covansys, told AFP war and a potential oil crisis would impact on any recovery.

"All of this has a negative impact on the recovery of markets and hurts sentiment."

Malaysian Prime Minister Mahathir Mohamad said U.S. policy on terrorism was irrational and getting rid of Iraqi leader Saddam Hussein would not solve the problem.

The veteran Southeast Asian Muslim leader told journalists he understood that "Americans are very angry. And of course they have reasons to be angry, but when people are angry they tend to become irrational.

"If you want to fight against terrorism you have to identify the reasons why terrorists are like they are."

Mahathir has strongly urged U.S. President George W. Bush to take a multilateral approach towards Iraq and not launch a unilateral attack.

"Getting rid of Saddam is not going to solve the problem," he said.

Mahathir said earlier that fear of terrorism and reactions to that fear were making the already regressing world economy shrink further.

Australia's Downer referred to the Islamic militant group Jemaah Islamiyah (JI), which he said had links with Osama bin Laden's al-Qaeda network, as a threat to regional stability.

"An organization like JI, spread from the southern Philippines to Malaysia, Singapore and Indonesia is the greatest terrorist threat to Asia," he said.

Downer said Australia was working closely with Southeast Asian nations to crush the group as soon as possible.

United Nations AIDS chief Peter Piot warned that HIV/AIDS could hamper economic growth with "tens of millions" in Asia infected over the next decade if the region failed to move fast to curb the epidemic.

There are now some seven million Asians infected with HIV/AIDS but the epidemic is spreading "very fast" in the region due to denial and inaction especially in rural and provincial areas, he said.

"If business continues as usual in Asia, then we will go to tens of millions (of infections over the next 10 years)," he said.

"In China alone, one can say safely that there will be at least 10 million, maybe 15 million."

Piot urged the corporate sector to shoulder the cost of fighting the epidemic after government funds dwindled in the aftermath of the 1997/98 Asian financial crisis.

John Kivits, Standard Chartered Bank's chief executive in Malaysia, said the HIV/AIDS epidemic was a "big economic issue" for businesses and could translate into significant costs.

In Africa for instance, he said the bank recorded an average 10 percent absenteeism daily by its staff due to HIV/AIDS related matters and its operation costs in Zimbabwe had risen by 11-13 percent due to the disease.

Meanwhile, Malaysia's Trade Minister Rafidah Aziz said at the conference that the threat of war in the Middle East threatens to slow the progress of global trade talks already hindered by sharp differences between rich and poor nations.

Efforts by the World Trade Organization to further liberalize global trade will be hurt by the current uncertainties facing the economy.

That poses further troubles to world trade negotiations that frequently have been troubled by lingering concerns among poor nations that market-opening measures will mainly favor the rich traders, she said.

"Nobody is going to open the market if they are not sure whether their domestic economy is going to be destructed," Rafidah said at the three-day conference, which closes Tuesday.