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Asian economies recover, but still vulnerable to hot money |
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May 23, 2000
BANGKOK, MAY 22 (AP) - Though Asian economies are recovering from devastating crisis, they remain vulnerable to the fickleness of fast-moving hot money and downturn in the United States or Japan, U.N. officials said Monday.
And if Asia has learned anything from the crisis, they warned, it should be to get a grip on capital flows, even if the price is lower growth than the red-hot rates of around 9 percent in the mid-1990s.
Developing countries in the region are expected to grow a healthy 6.2 percent this year, shrugging off recession in 1997 and 1998, but the recovery depends on exports, according to an annual survey released Monday by the U.N. Economic and Social Commission for Asia and the Pacific.
"Let's hope that the U.S. economy continues to grow, Europe, and particularly Japan," Adrianus Mooy, the body's secretary general, told a news conference accompanying the report. "We need the support of the Japanese market for the economies of this region."
But local demand has still not revived due to lingering job fears, the report said, making the countries vulnerable to ill economic winds from the United States.
Many economies still rhat long-term investment cannot be financed by short-term money, Islam said.
"When we achieved higher growth in the past, everybody assumed it would go on and on," Islam said. "Countries will continue to maintain a high growth rate, but they should not think about maintaining an 8-to-9 percent growth rate over a long period of time."
Many Asian nations blame the International Monetary Fund, which organized bailouts for Thailand, Indonesia and South Korea, for reacting too slowly to the crisis and imposing strict lending conditions that worsened the recession.
The commission said a move by the Association of Southeast Asian Nations to create a pan-Asian agreement in which countries could borrow foreign reserves from each other in times of crisis was a positive step.
However, the United States would remain cool to any setting up of an Asian monetary fund to rival the IMF, which would be a threat to Washington's influence on global economics.
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