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March 11, 1999

A new survey predicts that many of the battered economies of Asia are
beginning to slowly recover from the financial crisis.	The survey says some
countries' economies may actually post modest growth rates.  However,
analysts are warning against premature jubilation.

The survey of more than 100 research units, conducted by the Reuters news
agency, predicts that Asian economies will be back on the road to recovery by
next year.

The survey, which did not include Japan, says China will lead the pack with
growth expected to reach 7.4 percent this year and next.  South Korea, which
was expected to experience economic contraction, may have growth of 2.2
percent.  Only Indonesia and Hong Kong are predicted to experience more
shrinkage.

But despite the good news, analysts warn against complacency.  At a conference
in Bangkok this week, Ambassador Michel Caillouet of the European Union says
there is reason for optimism -- but that optimism should be guarded.

"However, I would like to stress that complacency, or excessive confidence,
should be avoided.  For it cannot be totally excluded that financial
conditions could worsen further in the course of 1999."

Robert Fitts, Economic Counselor at the U.S. Embassy in Bangkok, agrees with
that warning.  He quotes U.S. Deputy Secretary of Treasury Lawrence Summers as
saying that fear has been replaced by complacency.

"He said that whereas in 1998, many of the economies out here, their major
worry was fear, that the business communities, both domestic and international
business communities, would overreact to the crisis out of fear and thus make
the crisis far worse than it need be.  He then said he thought the overall,
theme, or one of his many worries was the overall theme for 1999, the theme
might be complacency."

Why the notes of caution?  Well, the analysts say the recovering countries
have yet to demonstrate they have learned the lessons of the crisis.  They
say the affected countries have to enact the necessary reforms and put the
structures in place to guard against it happening again.  As Mr. Fitts puts
it -- again quoting Deputy Secretary Summers -- recover also entails
substantial changes in economic lifestyle.

"It's like you've had a heart attack.  There are measures you take to
stabilize yourself, to get yourself out of the hospital, to get yourself back
on your feet.  But then there are far more important long-term measures you
have to take to make sure you don't have another heart attack again.  This
means a change in lifestyle, it means restructuring your diet, perhaps, in
Mr. Summers' metaphor.	But in real life it means restructuring the way you
do business, the debt equity structure of your corporations, and it means a
lot of difficult decisions ahead."

Mr. Fitts adds that countries should refrain from the impulse to put
restrictions on foreign investment, even though there may be great domestic
political pressure to do so.  He says foreign investment encourages an economy
to grow rather than borrow -- and it was borrowing that set off the Asian
economic virus in the first place.

Global Investing News at
http://www.cyberhaven.com/globalinvesting/


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