The panel of corporate leaders in Southeast Asia constituted of Vincent Tan, CEO of Berjaya Corporation Berhad, Tanri Abeng, Chairman of Telkom in Indonesia, Duong Ngeap, Chairman of DNG Group, Le Song Lai, Deputy General Director of State Capital Investment Corporation in Vietnam diagnosed the current Asian situation amid the turbulent financial global market during the lecture at the 9th World Knowledge Forum held at Sheraton Hotel in Seoul, Korea.
Vincent Tan started out by explaining what has happened in Asia after the Financial Crisis. Mr. Tan claimed that Asian countries are better positioned, prepared and equipped after the financial turmoil. According to Mr. Tan’s statement the following has happened: most nations have accumulated massive foreign currency reserves which provide an insurance against potential external shocks; most have also increasingly borrowed in their own currencies reducing foreign exchange risks; and there was a regional initiative that provided safeguards and speedy response by the ASEAN+3 process in the formation of the Chiang Mai Initiative. He insisted that moving from a manufacturing-centered economy to a service-centered economy will help “weather any potential risks in the financial market.”
Regarding geopolitical and economic phases of greater Asia, Tanri Abeng said, “From a geopolitical perspective, Asia is very complex and dynamic region evidenced by the complex portfolio of each economy. In terms of purchasing power, Asia accounts for 10 percent of the world’s entire purchasing power which amounts to $200 billion.” However, Asia’s GDP only accounts for 6 percent of the global GDP although Asia’s entire population accounts for 73 percent of the world’s population.
Mr. Abeng continued: “Inadequate regulation of Asian financial system led to both a build up of bad loans and a mismatch between short-term offshore borrowing and illiquid long-term local lending by financial institutions.”
He also mentioned that the Indonesian stock market’s plunge was driven by psychological factors rather than business fundamentals adding that a large number of firms in Indonesia are healthy and sound.
Meanwhile, Duong, Ngeap, Chairman of DNG Group asserted the changed aspects of Cambodia in terms of financial crisis exemplifying Korea’s investment into Cambodia in the face of the global financial crisis. He then claimed that although the ability to absorb huge amounts of foreign capitals in a short period of time could once again cause inflation in Cambodia, the outflow of foreign investors’ funds within Cambodia due to financial crunch are unlikely to occur.
Approaching the end of discussion, Le Song Lai, recognized the benefits of financial decoupling citing Korea -- like other Asian countries -- is still in a good shape for other nations to invest. He also said that the current effects were limited since the Asian countries had limited integration in the global economy. He mentioned that $57 billion has been infused into the Asian market last year.
[Eun-jung Kim / JYJ] [ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]
