Asian countries must reduce their heavy dependence
on exports if they want to sustain the robust turnaround
after the 1997-98 financial crisis, David Burton, director
of IMF''s Asia-Pacific department, said.
"Asia continues to rely heavily on net exports as
an engine of economic expansion," Burton said, adding,
"Over time, greater reliance on domestic demand will
be needed to assure a more balanced and sustainable pattern
was speaking at the Singapore Press Club on the challenges
facing Asia 10 years after the financial crisis, which
erupted after the Thai baht plunged on July 2, 1997.
way to address the problem would be to bolster foreign
investment, which hasn''t recovered strongly in the region
- except for China - following a sharp drop 10 years ago.
pre-crisis levels of investment were certainly excessive,
the limited recovery is puzzling," Burton said.
Thai crisis was the result of a sudden outflow of foreign
capital from Thailand, which had sustained investment
in property and other projects, leading to a rapid devaluation
of the Baht. Panic spread through Indonesia and South
Korea to the entire region and recession followed.
crisis has mainly been to a lack of transparency and weaknesses
in the corporate and banking sectors, Burton said. In
many cases, large unsecured loans were given to businesses
with political connections, he pointed out.