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To: Box-By-The-Riviera™ who wrote (2136)	10/12/1998 7:55:00 AM
From: Box-By-The-Riviera™	Respond to of 3339

Monday October 12, 3:40 am Eastern Time Asia could kick off global meltdown-economists By Angela Tan SINGAPORE, Oct 12 (Reuters) - Asia's economic crises could result in a global recession as early as next year if Japan does not recover, economists at the East Asia Economic Summit said on Monday. They said that while Asia's fundamentals were strong -- stable macro-economics, emphasis on skill upgrading, strong infrastructure and high savings rates -- the region's recovery was locked to Japan's. ''We are at a critical juncture,'' Kenneth Courtis, chief economist and strategist at Deutsche Bank Group Asia Pacific, Japan told the summit conference, sponsored by the Geneva-based World Economic Forum (WEF). ''In sector after sector, we have major problems brewing...All sectors have excess supplies,'' Courtis said. ''I think the biggest risk is Japan. If it doesn't get its act together, Japan will become the Titanic that pulls the rest of Asia along with it,'' Courtis said. Courtis said as the world's second largest economy, an ailing Japan which was contracting at a three to four percent rate could result in a global meltdown. ''It is the world's leading savings nation, the world's biggest creditor. If it goes into financial implosion then it becomes very difficult to see how we can avoid a global meltdown,'' Courtis said. ''There is no way to stabilise Asia without stabilising Japan and there's no way to stabilise the world's economy without stabilising Asia,'' he said. In order to stablise Japan, especially its beleaguered banking sector, the government needed to recapitalise all its banks, ailing or otherwise, immediately, Richard Koo, chief economist at Japan's Nomura Research Institute said. Koo said the Japanese government did not have the time to select the good or the bad banks for recapitalising as this would take up to five years, and the economy did not have that much time. Some officials felt Asia's high savings rate and export-led growth focus could be detrimental in the face of a global econommic slowdown, notably in the United States. ''Every country is focussing on an export-led growth except one. That is the United States who's buying,'' Clyde Prestowitz, President of the Economic Strategy Institute in the United States told the conference. ''We need demand consumption apart from the United States,'' he said. Prestowitz said if Japan remained ill, Asia recession worsens, the U.S. stock market falls and U.S. consumption declined, a global recession could hit as early as next year. ''The only way to pre-empt that pressure (for a global meltdown) is to get grwoth in the global economy and that's going to take about six months to get the machine going again,'' Courtis said. According to Manu Bhaskaran, Director of SG Securites Singapore, Asia's recovery could be hastened if the Federal Reserve cuts its rates further, if Europe eased its fiscal policy and if domestic demand in the United States and Western economies grew at two percent in order to absorb Asia's exports. The economists said the Fed should cut its key rates to three to 3.5 percent as anything higher would be ineffective. The WEF summit has some 700 executives, economists and government officials in attendance, with the Asian economic situation and its global implications the key topic.

To: Box-By-The-Riviera™ who wrote (2136)	10/12/1998 8:08:00 AM
From: Box-By-The-Riviera™	Respond to of 3339

Monday October 12, 7:49 am Eastern Time Sachs predicts IMF will fail in Brazil SINGAPORE, Oct 12 (Reuters) - U.S. economist Jeffrey Sachs resumed his attacks on the International Monetary Fund on Monday, predicting an immiment bail-out package for Brazil would be a failure. He told reporters the package looked a lot like those for Indonesia, South Korea, Thailand and Russia -- which totalled well over $100 billion -- which he said had not come close to meeting their objectives. The IMF, he predicted, would impose its usual conditions resulting in a lot of public money trying to defend an indefensible exchange rate through super high interest rates and tightened fiscal policies. ''You send the country into a recession and you put in public money that helps private creditors get their funds out,'' he said. ''If that what we see in Brazil, it would be an amazing testimony to the lack of real reform of the institution during this year and the lack of a new concept,'' Sachs said. The Harvard economist said his biggest disappointment was the failure of the United States and the IMF to make any significant proposals during the IMF annual meeting in Washington last week for the restructuring of the international system. ''We ended up at the end of the (U.S.) Congressional term with no real ideas about new approaches other than to give the IMF more money despite its failure throughout the entire year,'' Sachs said. -- Singapore newsroom (65) 870-3843; Fax (65) 776-8112