ROAD TO RECOVERY?

September 13, 1999
		The APEC nations are meeting this week in New Zealand to examine the progress of the Asian economic recovery. After this background report on the crisis, three economic analysts discuss the continent's economic health.

Nov. 23, 1998: Fighting the Asian flu. Nov. 17, 1998: Vice President Gore criticizes Malaysia at the APEC conference. Nov. 16, 1998: A look at the flow of money in and out of Asia. Oct. 9, 1998: A discussion on the world economic crisis. Oct. 8, 1998: The president of the World Bank discusses the world financil crisis. May 21, 1998: B.J. Habibie becomes Indonesia's new president. Feb. 3, 1998: Exploring the impact of Asia's economic woes. Jan. 19, 1998: A discussion on the IMF's handling of Asia's economic crisis. Nov. 26, 1997: APEC's annual conference concludes. Nov. 25, 1997: Asia's leaders look for answers at the APEC annual conference. Browse the NewsHour's coverage of Asia and Economic issues     Asia-Pacific Economic Cooperation International Mondetary Fund	SPENCER MICHELS: For two years, countries in Asia have been trying to recover from what came to be known as the "Asian flu." Last Friday, President Clinton gave a mixed assessment of the economic outlook ahead. PRESIDENT CLINTON: There are encouraging signs of recovery from South Korea to Thailand to Japan. There are also continuing difficulties, as all of you know, caused by everything from economic distress to neglect of human rights. Nowhere are those difficulties more pressing than in Indonesia. It has the capacity to lift an entire region if it succeeds, and to swamp its neighbors in a sea of disaster if it fails. SPENCER MICHELS: President Clinton is now at the economic summit in New Zealand. While the heads of state seemed preoccupied with the tenuous political situation in East Timor, the underlying good news was the prospect of a region getting back on its economic feet after approaching what, at the time, looked like an economic abyss. During those two years, currencies plunged, stock markets tumbled, and economies crashed. Among the results were food shortages in Indonesia, business failures including unfinished construction projects across Asia, and banking systems hit hard by a flood of loans gone bad.
	International monetary aid
	SPENCER MICHELS: Organizations like the International Monetary Fund intervened, providing hundreds of billions of dollars in economic aid in return for promises of painful financial reforms in the affected countries. Still, the situation was so dire that economic leaders feared the "Asian flu" could go global, laying low economies from Brazil to the United States. ALAN GREENSPAN, Federal Reserve Chairman: It is just not credible that the United States can remain an oasis of prosperity unaffected by a world that is experiencing greatly increased stress. SPENCER MICHELS: In fact, the downturn in Asia reduced that region's purchasing power and caused a sharp drop in orders for many U.S. exports. American farmers were especially hard hit. Now, at least three Asian economies -- South Korea, Thailand, and Malaysia -- are showing growth after hitting the skids in 1998. In 1999, those economies are projected to expand, or at least hold steady. Indonesia has been undergoing a fragile economic recovery, but economists say that is now threatened by the violence in East Timor. The rupiah continued to weaken, although the stock market leveled off after dropping on Monday. The two largest economies in the region still appear unsettled. While Japan has shown expansion for two successive quarters, analysts are divided over the country's economic prospects. And in China, despite slumping exports, decreased retail sales, and falling foreign investment, the economy is expanding and economic reform is moving ahead, slowly.