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I. Asia-Pacific region in predicament
Asian economy remains frail and weak this year, and the International Monetary Fund (IMF) has slashed its average Domestic Product growth (GDP) for 2009 to 2.7 percent. Due to implications of the ongoing global economic recession, the economies of the Asian-Pacific nations encounter "cold waves."
Japanese economy has sunken into the worst recession since the end of World War II, and industrial production plunged 9.6 percent in December 2008 as compared to the preceding month, the largest drop since Tokyo began measuring such data in 1953. IMF lowered its prediction for South Korea's economic growth to 2.0 percent for 2009 from 4.1 percent last year. Australian economy would contract by 0.2 percent in 2009 if no further measures were taken, according to Ray Brooks, the division chief of the IMF's Asia Pacific Department.
Meanwhile, the Reserve Bank of India (RBI) lowered India's GDP forecast to 7 percent for the current fiscal year, the lowest for the past six years. The economic growth forecasts for members of the Association for Southeast Asian nations (ASEAN) have also been turned lower.
Thai economy contracted 3.2 percent year-on-year in the last quarter of 2008, and this is the first-ever recession occurred in Thailand since the Asian financial crisis ignited in 1997. Vietnam's government lowered its economic growth target for this year to 6.5 percent from 7 percent in the face of the global slowdown, whereas IMF forecasted its economic growth rate of about 5 percent in 2009, lower than 2008's.
South Korea's January exports fell by 32.8 percent year on year, the steepest decline since it started announcing monthly tallies in 1980. Automobile sales in Japan, excluding 660 c mini-vehicles, slumped 27.9 percent in January from a year before, the sixth month in a row of sales. India's exports fell in October 2008 for the first time in seven years. Exports of ASEAN nations were also affected. Thai exports decreased 9.4 percent in the last quarter of 2008. Vietnam's foreign direct investment (FDI) in 2009 is predicted to decrease by 40 billion US dollars in 2009.
Meanwhile, Japan's unemployment jumped to 4.4. percent in Dec. 2008 from 3.9 percent in the preceding month, the biggest rise in almost 42 years, according to statistics released by the Ministry of Internal Affairs. South Korea increase 280,000 jobs in 2007, which was reduced drastically to merely 78,000 jobs by Nov. 2008. Philippines' unemployment rate rose 6.8 percent or 2.525 million in October 2008, Marianito Roque, secretary of the Department of Labor said. More than 300,000 Australians will join the dole queue over the next 18 months. if the Rudd government's latest unemployment forecast is realized, said an Australian minister of finance. There are more than half a million unemployed people in Malaysia, according to the Malaysian government.
II. "Heavy fists" employed to cope with slowdown
Japanese Prime Minister Taro Aso vowed to create 1.6 million jobs in his country over three years at a recent meeting of the emergency employment creation Panel at the Japanese Diet. And 75 trillion Japanese yen worth of fiscal package will likely push up the confidence for Japan's economic recovery. South Korea's central bank, the Bank of Korea, has cut base rate five times from last October by a total of 275 base points from 5.25 percent to the 2.5 percent at present. IMF predicts a possible 4 percent economic growth for 2010 in South Korea.
To spur its fast economic growth, India has taken, among other measures, the development of suitable market in infrastructure, tax cut, the vitalization of bond market, the injection of more funds in the financial system and the raising of the ratio of market Indian bond investment trust to overseas investors.
Australia announced on Feb. 3, last Tuesday a 42-billion Australian dollars (some 26 billion U.S. dollars) stimulus plan in fresh spending in hopes of ensuring 90,000 jobs and shielding its resources-based economy from the global downturn.
ASEAN countries also turned to "harsh medicine" to rescue their sagging economies. Singapore introduced a 20.5 billion Singapore dollars (about 13.7 billion US dollars) Resilience Package. The Philippine government included the 2009 budget a 300 billion peso (some 6.25 billion U.S. dollars) stimulus package to keep the engines of economic growth turning in the critical first few months of 2009. Its government officials disclose that their country would also send some contracted laborers to Qatar and Kuwait to fill existent job vacancies in a bid to cope with unemployment.
III. Actions for mutual coordination
IMF predicts that world economy will gradually resume in 2010 with a hopeful 3 percent growth for the year. The picking up of global economy will help create a relatively better exterior conditions. To support Asian countries, Prime Minister Taro Aso at the five-day annual meeting of the World Economic Forum held in late 2009 announced that Japan is prepared to provide support to them in the form of fund-raising, with a conviction that increased internal cooperation in the Asian region would facilitate recovery of global economy.
Asia-Pacific Economic Cooperation Organization (APEC) has defined the focus of the 2009 session as "sustained growth and regional alliance." Counting on a huge regional market, coordinated moves of the Asia-Pacific countries are conducive to turning the crisis into opportunities and resuming the economic vis and vigor of the Asia-Pacific economy.
IV. Experts' comments
Su Jinxing (a research fellow with the China Institute of Contemporary International Relations): Despite a slowdown growth, the Asia-Pacific economy still retains growth, and this is where the hope of global economy lies. The existing achievements and tremendous potential have determined that the Asia-Pacific nations are sure to play a vital role in the course of global economic recovery. At this point, the future of Asia-Pacific economy also represents the future of global economy. Asia-Pacific countries should step up their infrastructure investment, effect the industrial upgrading and maintain economic growth through expanding domestic needs on one hand and, on the other hand, they must resolutely oppose trade protectionism of Western developed countries so as to safeguard the normal operation of the entire global economic system.
Zhao Jiangling (the Director of the Institute of Asian Economy under the Chinese Academy of Social Sciences): Asia-Pacific economy has begun to readjust: It has taken the viable and effective proactive macroeconomic policies to enable part of the growth from its domestic needs to make up the drop in external needs on the one hand. On the other hand, it should accelerate regional cooperation to make part of the growth in the regional market to help remedy the drop in its export to the U.S.
Nevertheless, the Asia-Pacific is still facing fairly great challenges for its speedy economic recovery. The regional economy is expected to bounce back in the latter half of 2009 to the earliest and even at the end of the year. |
