AFP-Southeast Asia out of recession

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Subject: AFP-Southeast Asia out of recession but "vulnerable": finance FMs

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Thursday, November 25 8:29 PM SGT=20
Southeast Asia out of recession but "vulnerable": finance FMs
MANILA, Nov 25 (AFP) -=20
Southeast Asia on Tuesday declared its worst-ever recession was over but =
warned the region remained "vulnerable" and pledged to press ahead with =
reforms to blunt "significant risks" to sustained growth.

Association of Southeast Asian Nations (ASEAN) economies should grow =
between two and three percent on average this year compared to a =
disastrous seven percent slump in 1998, and are now "poised for higher =
and sustainable growth" from 2000, ASEAN finance ministers said after a =
meeting here.

Asked if the ASEAN recession is over, Philippine Finance Secretary =
Edgardo Espiritu told a news conference: "Yes, I would venture to say =
that."

But ASEAN ministers said in a joint statement that "while our economies =
look much healthier compared to a year ago, the situation still remains =
vulnerable and there are risks that need to be addressed if our =
economies are to experience high sustainable quality growth."

ASEAN members Indonesia, Malaysia, the Philippines and Thailand were at =
the center of a 1997 currency meltdown that ushered East Asia into its =
worst post-war economic crisis. Brunei, Cambodia, Laos, Myanmar, =
Singapore and Vietnam are the group's other members.

Ministers said they "conducted a peer review" and agreed "to press on =
with structural reforms.

Economists say the crisis exposed the absence of modern support systems =
such as unemployment benefits in the region, where millions of people =
lost their jobs or saw their earnings drastically slashed as companies =
and banks went bust.

Philippine Finance Undersecretary Joel Banares said China, Japan and =
South Korea, who will join ASEAN for a summit on Sunday, approved of a =
Philippine proposal to promote greater policy dialogues on monetary, =
financial and fiscal issues as part of "support mechanisms" in East =
Asia.

"They reacted very favorably to the idea of a support mechanism," he =
said.

China reiterated a frequent pledge to refrain from devaluing its =
currency the yuan, citing foreign reserves of 152 billion dollars, while =
Japan assured ASEAN that Tokyo will continue with reforms to sustain its =
"incipient" recovery, Banares said.

South Korea told ASEAN that its stunning recovery will be "sustainable =
and non-inflationary," Banares said.

Indonesian Finance Minister Bambang Sudibyo said that during the review, =
member countries took care "not to criticize our dialogue peers," and =
focused "more on the positive side."

"We are pleased with the progress in restructuring the financial sector. =
Public and corporate governance is being strengthened," the ministers =
said in their statement, referring to anti-corruption measures.

"Viable banks are being recapitalized, bad assets are being dealt with, =
and prudential supervision and regulation is being tightened."

The ministers said "corporate restructuring will be accelerated," with =
members agreeing to "implement bankruptcy codes and foreclosure laws =
that are in line with international standards."

The absence of proper bankruptcy and foreclosure laws has been blamed =
for distortions resulting from the continued operation of non-viable =
companies.

The ministers said ASEAN recognizes "the important role of capital flows =
to further sustain growth in our region," and reiterated the countries' =
commitment to create "an investment region with free-flowing capital."

They said there was a short-term "possibility of sharply lower growth in =
export demand if growth slows down" in the United States.

"Japan's recovery, which is critical for ASEAN, is still subject to =
significant risks despite recent positive views."

Most of the governments had boosted spending to get their economies out =
of the hole.

The Asian Development Bank on Tuesday sharply upgraded this year's =
regional economic growth forecasts for Asia to 5.7 percent on the back =
of a "far better than expected" rebound from the crisis.

The Manila-based bank boosted the original projection of 3.8 percent =
owing to strong recovery by the humbled economic tigers of South Korea =
and Southeast Asia and robust growth in China.


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<DIV><FONT face=3DArial size=3D2><B>Thursday, November 25</B> 8:29 PM =
SGT=20
<H2><FONT size=3D4>Southeast Asia out of recession but "vulnerable": =
finance=20
FMs</FONT></H2>MANILA, Nov 25 (AFP) -=20
<P>Southeast Asia on Tuesday declared its worst-ever recession was over =
but=20
warned the region remained "vulnerable" and pledged to press ahead with =
reforms=20
to blunt "significant risks" to sustained growth.</P>
<P>Association of Southeast Asian Nations (ASEAN) economies should grow =
between=20
two and three percent on average this year compared to a disastrous =
seven=20
percent slump in 1998, and are now "poised for higher and sustainable =
growth"=20
from 2000, ASEAN finance ministers said after a meeting here.</P>
<P>Asked if the ASEAN recession is over, Philippine Finance Secretary =
Edgardo=20
Espiritu told a news conference: "Yes, I would venture to say that."</P>
<P>But ASEAN ministers said in a joint statement that "while our =
economies look=20
much healthier compared to a year ago, the situation still remains =
vulnerable=20
and there are risks that need to be addressed if our economies are to =
experience=20
high sustainable quality growth."</P>
<P>ASEAN members Indonesia, Malaysia, the Philippines and Thailand were =
at the=20
center of a 1997 currency meltdown that ushered East Asia into its worst =

post-war economic crisis. Brunei, Cambodia, Laos, Myanmar, Singapore and =
Vietnam=20
are the group's other members.</P>
<P>Ministers said they "conducted a peer review" and agreed "to press on =
with=20
structural reforms.</P>
<P>Economists say the crisis exposed the absence of modern support =
systems such=20
as unemployment benefits in the region, where millions of people lost =
their jobs=20
or saw their earnings drastically slashed as companies and banks went =
bust.</P>
<P>Philippine Finance Undersecretary Joel Banares said China, Japan and =
South=20
Korea, who will join ASEAN for a summit on Sunday, approved of a =
Philippine=20
proposal to promote greater policy dialogues on monetary, financial and =
fiscal=20
issues as part of "support mechanisms" in East Asia.</P>
<P>"They reacted very favorably to the idea of a support mechanism," he=20
said.</P>
<P>China reiterated a frequent pledge to refrain from devaluing its =
currency the=20
yuan, citing foreign reserves of 152 billion dollars, while Japan =
assured ASEAN=20
that Tokyo will continue with reforms to sustain its "incipient" =
recovery,=20
Banares said.</P>
<P>South Korea told ASEAN that its stunning recovery will be =
"sustainable and=20
non-inflationary," Banares said.</P>
<P>Indonesian Finance Minister Bambang Sudibyo said that during the =
review,=20
member countries took care "not to criticize our dialogue peers," and =
focused=20
"more on the positive side."</P>
<P>"We are pleased with the progress in restructuring the financial =
sector.=20
Public and corporate governance is being strengthened," the ministers =
said in=20
their statement, referring to anti-corruption measures.</P>
<P>"Viable banks are being recapitalized, bad assets are being dealt =
with, and=20
prudential supervision and regulation is being tightened."</P>
<P>The ministers said "corporate restructuring will be accelerated," =
with=20
members agreeing to "implement bankruptcy codes and foreclosure laws =
that are in=20
line with international standards."</P>
<P>The absence of proper bankruptcy and foreclosure laws has been blamed =
for=20
distortions resulting from the continued operation of non-viable =
companies.</P>
<P>The ministers said ASEAN recognizes "the important role of capital =
flows to=20
further sustain growth in our region," and reiterated the countries' =
commitment=20
to create "an investment region with free-flowing capital."</P>
<P>They said there was a short-term "possibility of sharply lower growth =
in=20
export demand if growth slows down" in the United States.</P>
<P>"Japan's recovery, which is critical for ASEAN, is still subject to=20
significant risks despite recent positive views."</P>
<P>Most of the governments had boosted spending to get their economies =
out of=20
the hole.</P>
<P>The Asian Development Bank on Tuesday sharply upgraded this year's =
regional=20
economic growth forecasts for Asia to 5.7 percent on the back of a "far =
better=20
than expected" rebound from the crisis.</P>
<P>The Manila-based bank boosted the original projection of 3.8 percent =
owing to=20
strong recovery by the humbled economic tigers of South Korea and =
Southeast Asia=20
and robust growth in China.</P></FONT></DIV></BODY></HTML>

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