Down and still coupled
By Shawn W Crispin
BANGKOK - With falling exports, declining confidence and tight liquidity squeezed by fleeing foreign capital, Southeast Asia has wholly failed to decouple from the mounting downturns in the United States and Europe. Looking ahead to 2009, the question is not if, but rather how far, the trade-geared economies of the Association of Southeast Asian Nations (ASEAN) members will fall in line with the global economy.
As global trade collapses, some of ASEAN's 10 members will be hit harder than others, economists predict. The region's most open economies, namely Singapore and Malaysia, where merchandise exports respectively represent around 200% and 100% of gross domestic product (GDP), will be particularly hard hit. Others including Thailand, Indonesia and the Philippines, where exports represent a smaller, but still substantial, percentage of GDP will also see declining growth.
Hopes that China - with which ASEAN has a trade surplus driven by exports of raw materials and component electronics and computer parts for re-export to third countries - might buoy the region's economies have faltered with recent softening in China's export figures. Meanwhile, economists say that the stimulus package announced last month by China has been tailored mainly to tide over the domestic economy and Beijing has indicated no plans or extraordinary measures to lift the region's sinking economies.
Link to rest of article: http://www.atimes.com/atimes/Southeast_Asia/JL25Ae01.html
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