[stop-imf] As Gloom Spreads, IMF Tells SE Asia To Keep Up Reforms; Buffer Economies (fwd)

[Robert Weissman]

Associated Press
April 5, 2001

IMF Tells SE Asia To Keep Up Reforms; Buffer Economies

KUALA LUMPUR (AP)--As gloom spreads across Southeast Asia about slowdowns
in its two biggest export markets, an International Monetary Fund official
on Thursday urged regional governments to continue to reform their
corporate and financial sectors to buffer their economies.

Kunio Saito, the IMF's director of the Asia-Pacific region, said that
while growth was slowing globally, economies in Southeast Asia were still
expanding "at a very respectable rate" and many forecasters were
predicting a return to better conditions by year's end.

"Of course, compared with last year there is still a slowdown," Saito told
reporters after addressing Southeast Asian economic and finance officials
at a meeting in Kuala Lumpur. "But I don't think this is a case one should
get overly excited about. Most of us a projecting some pickup toward the
end of this year.

"The important thing is to move ahead with the various policies," he said.
"I think in this part of the world, this (means) restructuring corporate
and financial sectors."

Saito was among officials of the IMF, the World Bank and the Asia
Development Bank who briefed government and central bank officials from
the 10-country Association of Southeast Asian Nations grouping on
Thursday.

The briefing, which Saito described as being on the "global and regional
economic outlook and policy challenges the region faces," comes ahead of a
weekend meeting of ASEAN finance ministers as well as those from Japan,
China and South Korea.

Juanita d. Amatong, an under-secretary of the Philippines department of
finance, said after the briefing that Southeast Asian countries were
worried about the effects of slowdowns in the U.S. and Japan.

The U.S. financial downturn and new weakness in Japan are expected to top
the agenda at the ministers meeting, which begins Saturday. The U.S. and
Japan are Southeast Asia's biggest trading partners, and the strong U.S.
economy helped countries such as Malaysia recover from the 1997-98 Asian
financial crisis by buying its electronic goods.

Multibillion-dollar IMF and World Bank bailout packages for countries
worst hit by the crisis - including Thailand, Indonesia and South Korea -
emphasized economic, banking and corporate reform.

In a report published in late March, the World Bank predicted that Asian
economies would be hurt this year by weak U.S. demand for imports, but
would keep growing because of reforms begun after the financial crisis.

China would be the best performer in Asia, although last year's 8% growth
would fall to 7.3%, the bank predicted.

The sharpest fall in growth would be in South Korea, from 8.8% last year
to 4.5% this year, the bank said. Overall growth for Indonesia,
Philippines, South Korea, Malaysia and Thailand would fall to 4% this year
from 7.1% last year.

Especially hard-hit will be electronics exporters such as South Korea and
Malaysia. Malaysia's government revised down its forecast for gross
domestic product growth to around 6% from a late-October forecast of 7.0%
economic growth this year.