Optimism in Seoul About Asia's Prospects
Updated
World government representatives and financiers meeting in the South Korean capital, say prospects for Asian economies are brighter than they were a year ago.
The vote of confidence was given at the World Economic Forum which ends later today in Seoul.
Presenter: Brett Cole
Speaker: Rajat Nag, managing director general of the Asian Development Bank; Cho Suck-rai, Chairman of the Federation of Korean Industries; Joe Rice, chairman of the New York firm Clayton, Dubilier & Rice; Sir David Wright, former U.K. ambassador to South Korea and Japan
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COLE: Summer skies over Seoul may not be blue because of the pollution but the balmy weather appropriately mirrors the optimism many in Asia see as the prospects for their economies over the next 18 months. Economic growth this year in Asia, ex-Japan, will be 3.4 percent, according to Rajat Nag, managing director general of the Asian Development Bank. Mr Nag thinks that growth in the region will reach 6 percent next year.
NAG: Asia will lead the way out for the rest of the world. Our projections are that 2010 Asia will grow at about 6 percent. This is a fairly healthy clip. Much lower than the 9.5 percent we saw in 2007 but certainly you're beginning to see the recovery.
COLE: But the scars of the latest global economic meltdown are not easily brushed aside with talk of a nascent recovery, especially in Korea which has gone undergone two painful economic recessions in a decade. Cho Suck-rai, Chairman of the Federation of Korean Industries, believes that in order to prevent Wall Street from running amok and causing devastation to the economy, financial companies and markets have to be closely supervised.
CHO: To prevent global financial crises from repeating again, global policy coordination is needed to strengthen the financial supervision, to reform the financial regulation and to ensure sound financial fundamentals. Also reforming the IMF (International Monetary Fund) should be discussed to help stabilize the global financial market.
COLE: Not surprisingly, financiers at the World Economic Forum in Seoul, are wary of more oversight of their activities. Joe Rice, chairman of the New York buyout firm, Clayton Dubilier & Rice, explains.
RICE: Private equity has historically played a very positive role in relieving the stress on existing corporate balance sheets. Some legislation may be appropriate but too much legislation will really do more damage than I think is justified.
COLE: Asian governments have a more pressing concern than keeping U.S. financiers happy however. Millions have lost their jobs or seen their incomes plummet because of the global recession. About 900 million people in Asia live on less than $1.25 U.S. a day, according to the Asian Development Bank. A former U.K. ambassador to South Korea and Japan, Sir David Wright, says poverty leads to political turmoil.
WRIGHT: The fact that much of this crises, that the pain is being borne by the unskilled workforce, that's going to create real political tensions.
