gst, any comments? <Tuesday July 27, 9:29 pm Eastern Time
Experts wary on Asia despite signs of growth
By Michiyo Yamada
WASHINGTON, July 27 (Reuters) - Asia's economic crisis is not over yet, despite figures
showing growth, investment and a likely boom in trade, economists and international experts said
on Tuesday.
The analysts, dismissing Washington's ''official consensus'' that the crisis had abated, said
governments and corporations were not following through on economic reform and people were
still suffering from the slump.
''There are still reports of millions of people without jobs,'' Robert Wade of Brown University told a seminar organized by the
Economic Policy Institute. ''There are ... serious problems.''
The crisis started just over two years ago in Thailand and spread to Indonesia, South Korea and beyond. At its peak, toward the
end of 1998, credit dried up even in rich industrialized countries, and central banks cut interest rates to boost flagging market
confidence.
Experts from the International Monetary Fund and from elsewhere expect growth this year for countries such as Malaysia, South
Korea and Indonesia. But M. G. Sri-Ram Aiyer, director of the World Bank's South Korea department, said the recovery there
was ''still fragile.''
Aiyer said the share of city dwellers living below the poverty line doubled to between 12 percent and 18 percent from 6 percent to 9
percent last year. ''For a lot of people, purchasing power has gone down,'' he told a separate news briefing.
Aiyer said small and medium-sized firms were struggling to obtain credit and the countries needed structural reforms.
The crisis exposed huge weaknesses in the corporate and financial systems of nations that had previously grown so fast that experts
dubbed them ''Asian tigers.''
The analysts now fret that an apparent end to the crisis could ease the pressure for change and make it more likely the problems
could occur again.
Wade said that countries like South Korea and Thailand had boosted their export capacity as their economies recovered. But they
remained heavily dependent on a strong U.S. market for their exports.
''There is particular worry about the future,'' he said.
Even South Korea, which is already repaying money borrowed from the IMF from 1997, was not guaranteed a lasting recovery.
''The Korean economy is recovering, but I am not quite sure how long this recovery will continue,'' said Inchul Kim, visiting
professor at American University in Washington.
South Korea is reporting a strong rise in domestic confidence, helped by low interest rates. Industrial output soared 21.8 percent in
May -- the strongest monthly year-on-year growth rate in almost 11 years.
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