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`Flu' grips Asian economies

From the Militant, Vol. 62, no. 45
15 December 1998

Countries throughout southeast Asia face recession conditions: a sharp downturn in economic growth this year and "gloomy" prospects for 1999, according to a report from the Asian Development Bank (ADB). The report stated Indonesia is baring the brunt of the crisis. "Civil unrest and an unexpected change of government in Indonesia heightened the sense of instability" there, it stated. The Gross Domestic Product (GDP) of that country is expected to contract 16 percent this year, as opposed to the 3 percent projected earlier. Nearly 50 percent of Indonesia's 200 million-plus people are living below the official poverty line - four times the number in 1996.

This year Thailand's GDP will shrink 7 percent, Malaysia's 6 percent, and the Philippines' nearly 2 percent. Most of these countries are expected to stay in recession next year.

Many banks in these countries are nearing collapse. In Indonesia bad loans could rise 35 percent by year's end. Thailand can expect a 30 percent rise, Malaysia 25 percent, and at least 10 percent for the Philippines. Official unemployment rates have risen 13 percent in the Philippines, 9 percent in Indonesia, 7 percent in Malaysia, and 8 percent in Thailand. "Over 30 billion dollars fled Indonesia, Malaysia, Thailand, and the Philippines in 1997 and 1998 (as a result of the crisis which has been pounding the region since July 1997)," the ADB reported.

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