Singapore’s Lee Says Asia Far From Situation Before `97 CrisisSharon Chen
Asia’s fundamentals are strong and “far” from the conditions before the 1997 regional financial crisis, Singapore’s Prime Minister Lee Hsien Loong said.
“I do not believe that we are in the situation of the Asian financial crisis,” Lee said in his speech in the city state late yesterday. The region is “between challenges but overall, we’re in a stable position,” he said.
Lee said the prospects of a tapering in the U.S. quantative easing led to an outflow of capital and currency depreciation in Asia, with investors doubting the sustainability of the growth in emerging markets. He added the situation has stabilized even as risks remain.
Emerging markets recovered after U.S. policy makers said this week they want more evidence of an economic recovery before paring its $85 billion-a-month quantitative-easing program. Federal Reserve Chairman Ben. S. Bernanke had said in June the central bank may start curbing stimulus this year and end it in 2014 if the economy finally achieves sustainable growth.
Territorial disputes in the South China Sea, Korean peninsula and terrorism are among “potential hotspots” for Asia, Lee said, posing a risk to stability. In the longer term, the “single biggest determinant” of regional security is China’s peaceful development amid a shift in global balance, he said.