Worst yet to come for S. Korea and Indonesia: ADB official
Worst yet to come for S. Korea and Indonesia: ADB official
GENEVA (Reuters): The worst is yet to come for the crisis-hit economies of South Korea, Indonesia and Thailand, and it is no time for early rejoicing, a top official of the Asian Development Bank said on Wednesday.
ADB's Vice President Bong Suh-lee made the warning in an interview with Reuters at the Asian Development Bank's annual conference in Geneva, in sharp contrast to bullish comments from many Asian officials on prospects of recovery.
"The worst is still to come this year for South Korea, Indonesia and Thailand. Unemployment in these countries will grow. Things will get worse before they get any better," Lee said.
"There are still a lot of things to be done. The actual repercussions of the crisis are going to happen in 1998. I do not see a full recovery as such. What may happen is that the downturn of economies may cease, but recovery will take some years," he said.
Lee said unemployment, which barely existed in the region's fast-growing economies up until the crisis, was likely to increase in South Korea and in Thailand.
"South Korea hasn't experienced unemployment in decades. All of a sudden, if the figure almost triples in the course of a year, the social repercussions will be very significant," Lee said.
"Social disturbances can also have political disturbances in South Korea and Indonesia," he added. "In the long run, democracy would help."
Both Indonesia and South Korea have topped the worry list of bankers at the Geneva meeting with their rising unemployment and expected economic contraction.
On Sunday, Seoul reported its seasonally unadjusted jobless rate in March at 6.5 percent -- the highest figure in 16 years.
As South Korea's unemployment rate soars and the country's bloated business groups drag their feet over restructuring, analysts fear the result could be social unrest.
Unemployment has also been climbing in Indonesia and is estimated by the government to rise to 13 million people by the end of the year from around nine million now.
Indonesia has been slammed by the regional woes and expects the economy this year to contract by 5 percent. In addition, a series of student protests has swept the oil-rich country, with growing calls for President Soeharto to step down to take responsibility for the economic crisis.