---------- Forwarded message ---------- Date: Thu, 8 Apr 1999 12:57:52 -0400 From: Robert Weissman <[EMAIL PROTECTED]> To: Multiple recipients of list STOP-IMF <[EMAIL PROTECTED]> Subject: ASIAN CRISIS: Impacts Worse Than Expected, UN Says UN Wire http://www.unfoundation.org (United Nations Information Services, 8 Apr) ASIAN CRISIS: Impacts Worse Than Expected, UN Says "The economic crisis that began in Asia in 1997 has turned out to be more long lasting, widespread and deeper" than previously thought, posing "dramatic and severe" social problems, said the UN Economic and Social Commission for Asia and the Pacific (ESCAP). Here are some of the key findings of ESCAP's 1999 survey of the region, which compares statistics for 1998 with those of 1997: The percentage of the population in poverty increased in Indonesia from 11% to 40% and in Thailand from 11% to 15%; Unemployment increased in Indonesia from 4.7% to 21%, in Malaysia from 2.7% to 6.4%, in the Republic of Korea from 2.6% to 7.7%, and in Thailand from 1.9% to 4.4%; The growth of GDP for all developing countries in the region fell from 5.8% to 0.2%, while in Southeast Asia alone, GDP growth fell from 4.3% to -6.2%. In East and Northeast Asia, GDP growth fell from 7% to 1.5%. However, in Southwest Asia, GDP growth rose from 4.6% to 5.3% Except for Papua New Guinea and the Solomon Islands, the Asian financial crisis did not have a direct impact on the Pacific Island economies. "However, many of them were indirectly affected because of the impact" of the crisis on trading partners such as Australia, Japan and New Zealand. The drought associated with the El Nino weather phenomenon "was largely responsible" for the Pacific Island nations' poor economic performance in 1997. Plenty Of Advice The ESCAP reports that the ability of governments to address these problems "has been constrained by reduced revenues and in some cases by the conditionalities of bailout packages." Therefore, at the national level, the UN agency recommends greater transparency in corporate affairs and more effective institutional arrangements for financial sector oversight. At the international level, ESCAP recommends better supervision of capital flows, "a more equitable delineation of the roles of foreign creditors and debtors," and improvements in emergency assistance. At the regional level, ESCAP recommends the "development of early warning systems," greater cooperation in financial sector supervision and the establishment of "common prudential standards." The agency also urges the creation of an Asian Fund, a Social Fund and unemployment insurance systems. Looking On The Bright Side The economic fate of Asia remains uncertain, due partly to the weak state of the Japanese economy, the "possible slowdown" in the European Union, and slower growth in the US economy. On the positive side, however, current accounts have shown "major improvements"; foreign exchange reserves "have been substantially rebuilt"; exchange rates and stock markets are recovering; interest rates have dropped significantly; and inflationary pressures have been kept in check (United Nations Information Services, 8 Apr). The Associated Press emphasized the prospect of a "modest turnaround" in the region later this year, with regional GDP growth expected to reach 3.6% (8 Apr). Agence France-Presse reported there is a chance of a "mild economic recovery," depending on regional and international factors (8 Apr). Information Technology Part Of The Answer The survey also reflects the themes of this year's ESCAP annual meeting, scheduled for 22-28 April: information technology (IT), globalization, economic security and development. The report notes that the spread of IT "both boosts economic growth and escalates risks to the economic security" of the region. It notes that IT investment in the region grew at 15% a year between 1992 and 1997, and that "the future is Internet commerce." ESCAP suggests that the region can use IT for better international coordination, and that countries can independently use IT to better supervise their financial systems and reduce corruption .
