Pacific looks at Asian economic recovery By Craig DeSilva For Saipan Tribune
HONOLULU, Hawaii (PIDP/CPIS) –For many participants at this year’s 33rd annual meeting of the Pacific Basin Economic Council (PBEC), one question remains: Is economic recovery in the Asia Pacific region sustainable?
For many in the Pacific region, the answer can’t come soon enough.
When Asia’s financial markets went south in 1997, many Pacific Island countries and territories felt the effects through a decline in Asian tourists and shrinking foreign aid and grants.
The good news is the worst may be over, said economic experts attending the PBEC meeting at the Hawaii Convention Center from March 17-22.
Still, the question remains: When can the Asia Pacific region show sustainable growth?
“Don’t expect the tiger economy we had in the past,” said Roberto de Ocampo, president of the Asian Institute of Management in Manila. “It will be a more sustained economy.”
He said recovery in the region is developing at a faster than expected pace. Asian banks are moving toward reform. Private businesses have trimmed their fat. And investment is making a comeback.
“Signs of economic recovery are there,” he said. “But the question is, ‘Is it sustainable?'”
Dr. Kenneth Courtis, vice chairman of Goldman Sachs Asia in Tokyo, is bullish on the region’s economy. He said the East Asian economy can only continue to get stronger.
“There’s a lot of optimism,” he said. “Although there are still lots of problems, there are also lots of opportunity.”
Courtis said although the region can expect to have a more volatile economy, businesses will become more flexible by adapting to changes and implementing internal reforms and restructuring.
For many in the Asia Pacific region, Japan will be the most watched economy. Many Pacific Island countries and territories depend on Japan for grants and foreign aid.
Richard Koo, chief economist at Nomura Research Institute in Tokyo, said Japan is moving in the right direction. Private companies are reducing their debts and cleaning up their balance sheets. However, as a result, companies have put off large-scale investments and are not borrowing from banks, despite low interest rates.
“Japan is under pressure to clean up its act,” Koo said “Japan is still very sick. But we’re headed in the right direction.”
Graeme Lawless, managing director of the Export Finance and Insurance Corporation in Australia, said it’s unlikely the Asia Pacific region will experience a repeat of the market crash in 1987. He said the challenge now will be attracting adequate financing and investment in the region.
“Growth will continue, but at a lower level,” he said. “It will still be robust and less vulnerable to crisis.”
The PBEC meeting, with more than 1,000 delegates and attendees, will continue in Honolulu until Wednesday.
PBEC is a group of influential corporate leaders from 20 countries in Asia, the Pacific, and North and South America. Its mission is to promote trade and investment.
Brenda Lei Foster, special assistant to Hawaii Gov. Ben Cayetano, said the meeting is an opportunity for companies to make business contacts for marketing their products in the Pacific region.
“I think the Asia Pacific economy is turning around,” Foster said. “There are several countries that are seeing real growth this year. If they keep growing, the more we will see disposable incomes being used in Hawaii, not just for trade and investment but also for tourism.”
