More oil anecdotes:
"In South Korea, signs of the world's oil price shock are everywhere:
Elevators now stop only at every other floor"
Asians Feeling Oil Price
Pinch
BY THOMAS WAGNER
Associated Press Writer
TOKYO (AP) -- In South Korea, signs of the
world's oil price shock are everywhere:
Elevators now stop only at every other floor
and the country's popular bathhouses have
been ordered closed one day a week to save
energy.
Next month, the country, which imports all its
oil, will raise home electric prices from 20
percent to 50 percent. Apartment managers
have warned residents to turn off their lights at
night and some bus drivers are threatening to
strike over a 17.5 percent increase in diesel
fuel prices.
Still, Asia has seen nothing as dramatic as the
oil price protests that blocked highways
across Europe, or the U.S. decision to release
30 million barrels of oil from its emergency
stockpile.
While Asia remains concerned about the
impact of high oil prices, there is no crisis yet.
``Many economists aren't lowering their strong
economic growth forecasts for Asia yet
because the region continued to do well during
the first half of this year, even after oil prices
doubled,'' said Tim Condon, chief Asia
economist for ING Barings in Hong Kong.
``But if prices continue to rise, creating a true oil price shock, that would
really cause people to change their views of these economies,'' he said.
In Asia, which relies heavily on imported oil, high oil prices have rattled
many stock and currency markets, helping drive some to record lows.
Consumers are grumbling about rising gasoline and other energy prices in
South Korea, China, Thailand, the Philippines, Hong Kong, Australia and
Pakistan. Those affected include everyone from taxi and rickshaw drivers,
to fishermen and farmers, to poor people who cook with kerosene.
Scattered protests have occurred in Australia, Thailand, the Philippines and
Cambodia.
The International Monetary Fund and some economists have warned that if
the steep oil prices continue they could slow Asia's strong recovery from
the 1997-98 financial crisis.
Asian countries that rely on exports could be hard hit if heavy use of home
heating oil in the West this winter drives oil prices up further and reduces
consumer spending in the United States and Europe on everything from
sneakers to computer software.
But so far oil prices haven't put a dent in the West's demand for Asia's
electronics and information technology goods. In August, export orders in
Taiwan rose 25 percent -- the 10th straight monthly double-digit gain.
The Asian Development Bank recently raised its projection for economic
growth in the region's developing countries this year, to 6.9 percent from
its earlier prediction of 6.2 percent. The new figure assumes oil prices will
hold at around $30 a barrel.
Not counting Japan, Australia and New Zealand, growth in the developing
economies of Asia and the Pacific reached 6.2 percent in 1999, according
to the Asian Development Bank. It said Asia's recovery is less vulnerable
to reversal because it now relies on improved consumer spending as well
as exports.
Japan, the world's second-largest economy, is expected to grow about 1.5
percent in 2000, and 2 percent in 2001. That would be the highest growth
rates in Japan since 1996.
South Korea's GDP growth of 10.7 percent in 1999 was followed by
12.8 percent growth in the first quarter this year and 9.6 percent in the
second quarter.
Better still, the three oil exporters in Asia -- Indonesia, Malaysia and
Brunei -- are benefiting from higher oil prices.
Indonesia, the region's only OPEC member, is expected to see its
economy grow by 4 percent this year, supported by firm oil prices,
according to an IMF report.
``The high oil prices are helping Indonesia a lot,'' said Song Seng Wun,
vice president of regional economics at GK Goh Research in Singapore.
``There is a $300 million net profit for Indonesia each time there is a $1
increase in the oil price.''
So far, the effect on consumers has varied widely in Asia.
Japan's strong currency, the yen, is offsetting the effect of the higher oil
prices. The country has sharply reduced its dependence on imported oil
by making more efficient use of fuel and switching to alternative energy
sources, such as nuclear power.
Gasoline prices have always been high in Japan, but price-cutting battles
among retailers have kept price increases to a minimum. Premium unleaded
gasoline has risen from $3.75 a gallon to $4.04 a gallon this year.
China also is partly shielded from the surge in oil prices because it burns a
lot of domestically produced coal. It produces more oil and oil-related
products than the amount of barrels it imports, meaning the rising oil
prices are a boon to its oil companies.
Gas prices have risen as much as 50 percent in Beijing in the last year,
putting them on par with those in the United States. The city responded by
allowing cab drivers to raise fares about 25 percent.
``It's not enough,'' said one cab driver, who gave his family name as Sun.
``After paying for all the costs of my cab, I have nothing left over.''
DAK |
