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DANANG, Vietnam: ASEAN finance ministers met in Vietnam on Friday to
look at ways of coping with soaring prices and the global economic
slowdown, which are expected to hurt growth across the region.
The spiraling cost of fuel and rice has drawn
warnings of unrest, and the ASEAN meeting comes just days after the
Asian Development Bank and the World Bank both cut growth forecasts
for 2008 — in part over surging inflation.
Ministers from the 10-nation Association of
Southeast Asian Nations gathered in the Vietnamese city of Danang,
looking for the “best common measure” to address the situation,
Vietnamese Deputy Prime Minister Nguyen Sinh Hung said.
“Recent developments in global and regional
financial conditions are posing new challenges to maintaining
macroeconomic stability and growth of individual countries and the
whole region,” he said at the annual one-day meeting.
But many experts believe that Asia in general
will be able to weather the financial turmoil that started in the
United States with the subprime mortgage crisis better than it would
have been able to do in the past.
With the crisis hitting demand in the United
States, a key export market for Asian nations, there was
nevertheless still cause for a “cautious optimism” in the
region, World Bank managing director Juan Jose Daboub told AFP.
“East Asia’s strong, long run of growth has
not been driven by year-to-year fluctuations in world demand, but
rather by improvement in productivity, innovation, quality control,
education and skills,” he said.
“These underlying strengths of East Asian
economies will neither be undone by the financial turmoil nor by a
slowing global market.”
But he stressed that nations still had a tricky
task ahead, not least because of the mounting food prices that are
having an especially strong impact on the region’s many poor.
Daboub said there were “three balls” to
juggle: “One being the impact of the situation in the United
States... the second ball being of course food prices and oil
prices, and the third one keeping the pace of reforms.”
“In virtually every East Asian country, high
food prices are raising headline inflation and contributing to a
significant decline in the real incomes of the poor,” he said.
The World Bank said there could be an aggregate
income loss of one percent of gross domestic product due to price
increases.
“Dealing with high food and fuel prices
probably constitutes a greater challenge to governments in East Asia
than the financial turmoil in the United States and a slowing global
economy,” it said.
ASEAN’s members are Brunei, Cambodia,
Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore,
Thailand and Vietnam.
-- AFP
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