Going Backward In Asia

Nearly a year into the Asian crisis, economic reform has barely begun, and the penalty is near-depression. Korea's gross domestic product contracted by nearly 4% in the first quarter. Thailand's recession will shrink the economy by 6% by yearend. Indonesia is in chaos. Hong Kong is near recession. And Japan remains stalled out. The realization that Asia has shifted from a financial crisis to a deep economic downturn is slamming stocks around the world, from Seoul to Moscow. Just five months ago, the markets were celebrating the quick recovery in Asia. Now, a second wave of Pacific Rim market declines is washing over the global economy. Recovery is now two to three years away.

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