November 24, 2008

World Economy - Asia Facing the Global Financial Crisis

Earlier this year, most businessmen and investors hoped that Asia's emerging economies could withstand the economic and financial turmoil in the developed world.

Now, however, stock markets seem to be betting on a rerun of Asia's deep recession after its own crisis in 1997-98. Share prices in the region have plunged by an average of two-thirds (in dollar terms) from their peak in 2007 almost as much as they fell during the Asian financial crisis.

Is Asia really heading for such a painful economic slump?

Meanwhile, leaders from Asia-Pacific countries have pledged not to respond to the global financial crisis by raising trade barriers over the next year.

In a statement issued at an Apec summit in Peru, they said protectionism would only worsen a difficult situation.

US President George W Bush urged Apec countries, which account for half the world's economic activity, to rely on free markets to resolve the crisis.

The meeting is Mr Bush's last scheduled foreign trip as US president before Barack Obama takes over as the 44th U.S. president. The statement was issued at the half-way point of the Asia-Pacific Economic Cooperation (Apec) summit.

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