economy: Tough times ahead

Carrie Reinheimer October 16, 2008 6:53 pm

Even though around the world most countries have been going in to recession most Asian countries have kept their head above water. Asian economies have demonstrated remarkable resilience. Asian export growth surprised everyone by “registering super-charged rates”, with the exception of Singapore and the Philippines. Asian exporters were adept at switching from low-growth markets to higher-growth ones such as Russia and the Middle East. Asia’s banks also continued to expand, suffering just a few ripples from the global turmoil. Consequently, GDP growth rates were maintained at reasonably high rates, despite some deceleration. However, we suspect that there’s a limit to what Asian financial institutions can do in this crisis. While they have access to large financial resources, most Asian banks lack the breadth and depth of management talent and the strong institutional processes needed to successfully take over large and sophisticated financial institutions in developed economies. More likely, Asian banks and sovereign wealth funds might be part of consortia that take over such institutions. Economic conditions in coming months will be among the toughest Asia has had to manage since the Asian crisis a decade ago. But, Asia today is far more robust than in the 1990s, helped by strong external balances, massive foreign exchange reserves; more diversified export bases and reformed banking sectors. Sure, there will be one or two countries with financial vulnerabilities or with confidence-sapping political problems that could suffer more than others but by and large Asian economies will continue growing and rebound strongly once the global crisis ends.
I think that is great that there are still a few countries out there that have managed to remain above water when it comes to the economy. It seems like the whole world is going into recession but the breath of fresh air from these Asian countries is a good one. I hope that we may be able to look at these countries and see what they are doing right and try to follow their lead. There is something that they are doing that is working and maybe we should take a look at them. Not only should we take a look at them but so should the rest of the world that is in recession along with the United States. There is only hope now that the economy will get better while we sit back and watch it bounce. If this bail out plan does not work we should consider looking at these countries to see what they are doing right.
http://www.dailytimes.com.pk/default.asp?page=2008%5C10%5C17%5Cstory_17-10-2008_pg3_6