The Global Economy in Turbulent Times

CHAPTER 121 ASEAN+3 Stimuli¹

Chapter 120 dealt with the outlook for ASEAN (centered on ASEAN-6, i.e., Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam). And, the country efforts to stimulate (à la Keynesian style) in the face of a menacing recession that has become globally driven. Successive monthly releases point to a worsening situation. Last week, the World Bank talks of more pain as widespread unemployment hits home.² Growth in 2009 for East Asia is now revised downward to 5.3 percent (from 6.7 percent in December 2008). Excluding China, the region as a whole will hardly grow within a global perspective that will see an overall contraction of close to 2 percent (first-ever decline since World War II (WWII). Transmission, at an astonishing speed, of the effects of the recession in the United States and Europe is spreading uncertainty and destroying business and consumer confidence.

East Asia

ASEAN+3 (i.e., plus China, Japan, and South Korea)—often loosely called East Asia—is determined to do better. At the recent Asian Economic Forum held in Jakarta, I left with the impression that there is sufficient political will in the region to help themselves; that firm leadership has since emerged to prevent a fait accompli; and that the way to go is to stay the pressure to stimulate, to reinvigorate the animal spirits, and to do “more rather than less” in order to reverse this psychology of worrying more about dangers than rewards, and to unshackle our entrepreneurs ...