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.