PACIFIC BASIN ECONOMIC COUNCIL
MAIN PAGE | EVENTS & PROGRAMS | 2001 | IGM | SPEECHES | CLYDE V. PRESTOWITZ

Additional Info: Policy Statements Speeches Photos Speakers & Noted Participants Featured Biographies Registration Media Information Conference Statement Regional Vitality in the 21st Century April 6-10, 2001 — Tokyo, Japan Clyde V. Prestowitz President Economic Strategy Institute Now it seems that we have a complete panel and actually I think our discussion this afternoon on the topic of revitalizing the Asian economies follows very nicely from the stimulating discussion that we had at lunch. One of the interesting aspects of the topic today is that the fact that we are talking about revitalizing the Asian economies. You may all remember in 1997, 1998 we had what has been termed the Asian financial crisis which eventually became a global crisis and at that time, there was much concern that it would take a decade or longer for Asia to recover. But by the end of 1998, we were talking about the miraculously rapid recovery from the crisis of the Asian economies. Now we are talking about the need to revitalize these economies which points to, I think, an interesting phenomenon of the past 3 or 4 years which is that maybe the crisis never actually went away. It was masked by the rapid injection of liquidity into the global system by Alan Greenspan and the Federal Reserve system which in effect create a bubble in the US which temporarily lifted the Asian economies from the crisis in 97, 98. But what we seem to be discovering is that the American bubble masked the problem, as the American economy has begun to slow down, it seems that many of the problems are still with us. [...] Thank you very much. I'm afraid we're out of time. I'd like to thank our distinguished panel for what I think has been a very enlightening and provocative discussion. I think we saw the two poles of the debate today. At lunch, we heard Richard Koo say that the problem is not structural, it's a balance sheet recession in Japan and all that needs to be done is essentially for the government to keep spending money to revive fiscal stimulus. This afternoon we heard several members of our panel say that the problem is in fact structural and rooted in political difficulties. I leave it to you to discuss with these gentlemen at the break and come to your own conclusions. Thank you all very much.