Countries in Asia and the Pacific need to expand trade links with each other if they are to weather the most widespread economic slowdown in five decades, a top UN official said yesterday.
"We cannot expect the United States to be the engine [of growth], nor Japan or the European Union," Kim Hak-Su, executive secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP), told a news conference in Bangkok.
ESCAP released a report yesterday assessing the regional impact of the Sept. 11 terrorist attacks that have contributed to the "most geographically synchronized slowdown since the Second World War."
The report said growth was "unlikely to revive much in the first half of 2002.''
Raj Kumar, ESCAP's director of development research, said that 40 percent of the region's exports go to the US and Japan, which had poor growth prospects.
The US economy was expected to grow by less than one percent next year, while Japan would shrink by between 0.5 and 1.0 percent, he said.
East and Southeast Asian countries, which are heavily dependent on exports to the US, would suffer most from the downturn, the report said. Countries like China and India with large domestic markets, would suffer the least, it said.
"Many countries in the region -- Singapore, Malaysia, India, and even to some extent Thailand -- have tried to promote more domestic growth, as well as trying to harness benefits from within the region itself," he said.
"I don't think it's a reversal of the export-led strategy, but more an assessment that you should not put all your eggs in one basket," Kumar said.
Kim said governments in Asia and the Pacific were looking at ways of expanding trade and expanding transnational road and rail links -- not to markets in the West as planned in the past -- but within Asia itself.
"Fortunately we have two big economies: China and India," Kim said. "After accession to the WTO, China can play a leadership role and be a small engine of growth in the region," he said.
The UN experts said that China's recent accession to the WTO was a positive factor for the regional economy in the long term.
But it was also worrying to China's regional competitors -- particularly in Southeast -- which feared Chinese dominance of export mar-kets and foreign investment.
Yet Kim cited Chinese officials as saying that in the past three years, 26 percent of China's imports had come from Asia and the Pacific, while just 16 percent of its exports had gone to countries in the region.
"I hope they maintain this, importing more from the region rather than competing [against it]," Kim said.
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