PACIFIC BASIN ECONOMIC COUNCIL
MAIN PAGE | CLIPS | 1998 | ASIA EMBRACES ENDING OF CRISIS

Asia embraces ending of crisis, beginning of growth Gao Wei China Daily Tuesday, April 21, 1998 The devastating financial turmoil in Southeast Asia seems to be coming to an end and the region will regain sustainable growth in the near future, said Robert Lees, secretary-general of the Pacific Basin Economic Council (PBEC). Lees concluded this based on his recent visits to Indonesia, Singapore, and Thailand, where he met extensively with governmental officials and members of local think tanks. He observed the values of local currencies have begun to pick up and local governments are encouraging business mergers, which present many investment opportunities. Although the region is still in a post-crisis stage, with the pains of the crisis still expected to be felt for a short time longer, the lessons learned from the crisis will prepare Asia for a more solid and sustainable growth in the near future, which will not be as hefty as that in the past, Lees said. The main cause of the crisis, according to Lees, is that the region's rapid economic development far outpaced the building of supporting institutions and management. Matching the two, Asia's future will look bright, Lees said enthusiastically. To date, many countries have made considerable efforts in this direction, the secretary-general noted. Local governments have ratified rules that did not exist before. Those rules are essential for the sustainable growth of the region. Central bank reforms, aimed at more transparency, are also under way. Impractical projects are being closed down and corruption and cronyism will be less, Lees said. Information gathered during his tour has also relieved some of Lees' concerns about more trade friction between the United States and Asia. He had worried weak local demand and devalued local currencies would trigger a surge of Asian exports to the United States and hence ignite trade tension between the region and the United States. Fortunately, local currencies are rebounding -- partly thanks to China's responsible decision not to devaluate its renminbi -- and the strong US economy can well afford to buy a lot from Asia, Lees said. Lees was in China to meet Chinese officials and business people for information about the nation's economy. Although the Chinese economy is experiencing a difficult time, Lees believes that the country's plan to inject US$750 billion into infrastructure construction will create growth and prosperity if it can be implemented as quickly as possible. More than 40 Chinese entrepreneurs will attend PBEC's annual meeting this year, one focus of which will be the financial turmoil in Southeast Asia.