News / Economy

    US, EU Slowdown Could Draw More Capital to Asia

    Asian Development Bank President Haruhiko Kuroda (File Photo)
    Asian Development Bank President Haruhiko Kuroda (File Photo)
    Ron Corben

    The Asian Development Bank says evidence of slowing growth in Europe and United States will draw more investors to better-performing Asian economies. While analysts remain upbeat over Asia's economic outlook in the coming year, a weaker U.S. dollar and contracting economies in Europe and the United States will hurt Asian exports - a key driver of growth.

    Despite the recent volatility in global stock markets, the Asian Development Bank remains upbeat for growth for Asia. In an annual report on Asian capital markets, bank analysts forecast seven per cent growth in the region for 2011 and 2012.

    Iwan J. Azis, head of the ADB’s Office of Regional Economic Integration, expects Asia’s recent consistent economic growth will make it favored by investors. But he says that an inflow of capital also poses challenges.

    “As the dust settles I strongly believe that capital inflows will continue to come into the [Asia] region and that creates problems that create challenges for the region," said Azis. "Right after the global recession of 2008 and [investment bank] Lehman [Brothers’] collapse massive capital inflows into the region created havoc and that can be repeated after the dust settles.”

    Any inflows of funds will push up the values of the region’s currencies against the U.S. dollar, undermining industries that depend on exports to the United States and Europe.

    “That translates into problems or challenges for export oriented economies in Asia like Thailand for example," said Azis. "They will have to work very hard on how to deal with these issues from both sides - the quantity side and the price side - the exchange rate.”

    Azis says that until recently, bank economists were mainly concerned over inflationary pressures in Asia due to rising commodity and food prices. But he says now those concerns are shifting because lower global demand eases price pressures on commodities such as oil.

    Narongchai Akrasanee, a former Thai commerce minister and board director of the Export Import Bank, says that since Asia’s financial crisis in the 1990s, the region has become less dependent on European and U.S. markets and more linked to China’s and India’s economies.

    “What has happened is that starting from 2007, 2008 we have been able to be less dependent on the western markets compared to the period before," said Akrasanee. "That’s why we were able to recover more quickly after 2009. I think at the moment the Asian market is a big help for us for the time being.”

    Asian Development Bank economists say the region’s central banks may need to review policies such a capital controls to manage a new flood of funds.

    But Tuesday’s report says a pattern of slow growth in the advanced economies is likely to continue beyond 2011. While Japan’s recovery is boosted by reconstruction from the March earthquake, sluggish job growth in the U.S. and the fiscal challenges in Europe are expected to "keep a lid on growth for some time to come."

    You May Like

    Republicans Struggle With Reality of Trump Nomination

    Despite calls for unity by presumptive presidential nominee, analysts see inevitable fragmentation of party ahead of November election and beyond

    Spanish Warrants Point to Russian Govt. Links to Organized Crime

    Links to several Russians, some of them reputedly close Putin associates, backed by ‘very strong evidence,’ Spanish judge says

    Video US Worried Political Chaos in Iraq Will Hurt IS Fight

    Iraq needs stable, central government to push back against Islamic State, US says, but others warn that Baghdad may not have unified front any time soon

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Press Freedom in Myanmar Fragile, Limitedi
    X
    Katie Arnold
    May 04, 2016 12:31 PM
    As Myanmar begins a new era with a democratically elected government, many issues of the past confront the new leadership. Among them is press freedom in a country where journalists have been routinely harassed or jailed.
    Video

    Video Press Freedom in Myanmar Fragile, Limited

    As Myanmar begins a new era with a democratically elected government, many issues of the past confront the new leadership. Among them is press freedom in a country where journalists have been routinely harassed or jailed.
    Video

    Video Taliban Threats Force Messi Fan to Leave Afghanistan

    A young Afghan boy, who recently received autographed shirts and a football from his soccer hero Lionel Messi, has fled his country due to safety concerns. He and his family are now taking refuge in neighboring Pakistan. VOA's Ayaz Gul reports from Islamabad.
    Video

    Video Major Rubbish Burning Experiment Captures Destructive Greenhouse Gases

    The world’s first test to capture environmentally harmful carbon dioxide gases from the fumes of burning rubbish took place recently in Oslo, Norway. The successful experiment at the city's main incinerator plant, showcased a method for capturing most of the carbon dioxide. VOA’s Deborah Block has more.
    Video

    Video EU Visa Block Threatens To Derail EU-Turkey Migrant Deal

    Turkish citizens could soon benefit from visa-free travel to Europe as part of the recent deal between the EU and Ankara to stem the flow of refugees. In return, Turkey has pledged to keep the migrants on Turkish soil and crack down on those who are smuggling them. Brussels is set to publish its latest progress report Wednesday — but as Henry Ridgwell reports from London, many EU lawmakers are threatening to veto the deal over human rights concerns.
    Video

    Video Tensions Rising Ahead of South China Sea Ruling

    As the Philippines awaits an international arbitration ruling on a challenge to China's claims to nearly all of the South China Sea, it is already becoming clear that regardless of which way the decision goes, the dispute is intensifying. VOA’s Bill Ide has more from Beijing.
    Video

    Video Painting Captures President Lincoln Assassination Aftermath

    A newly restored painting captures the moments following President Abraham Lincoln’s assassination in 1865. It was recently unveiled at Ford’s Theatre in Washington, where America’s 16th president was shot. It is the only known painting by an eyewitness that captures the horror of that fateful night. VOA’s Julie Taboh tells us more about the painting and what it took to restore it to its original condition.
    Video

    Video Elephant Summit Results in $5M in Pledges, Presidential Support

    Attended and supported by three African presidents, a three-day anti-poaching summit has concluded in Kenya, resulting in $5 million in pledges and a united message to the world that elephants are worth more alive than dead. The summit culminated at the Nairobi National Park with the largest ivory burn in history. VOA’s Jill Craig attended the summit and has this report about the outcomes.
    Video

    Video Displaced By War, Syrian Artist Finds Inspiration Abroad

    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Ethiopia’s Drought Takes Toll on Children

    Ethiopia is dealing with its worst drought in decades, thanks to El Nino weather patterns. An estimated 10 million people urgently need food aid. Six million of them are children, whose development may be compromised without sufficient help, Marthe van der Wolf reports for VOA from the Metahara district.
    Video

    Video Little Havana - a Slice of Cuban Culture in Florida

    Hispanic culture permeates everything in Miami’s Little Havana area: elderly men playing dominoes as they discuss politics, cigar rollers deep at work, or Cuban exiles talking with presidential candidates at a Cuban coffee window. With the recent rapprochement between Cuba and United States, one can only expect stronger ties between South Florida and Cuba.
    Video

    Video California Republicans Weigh Presidential Choices Amid Protests

    Republican presidential candidates have been wooing local party leaders in California, a state that could be decisive in selecting the party's nominee for U.S. president. VOA's Mike O’Sullivan reports delegates to the California party convention have been evaluating choices, while front-runner Donald Trump drew hundreds of raucous protesters Friday.
    Video

    Video ‘The Lights of Africa’ - Through the Eyes of 54 Artists

    An exhibition bringing together the work of 54 African artists, one from each country, is touring the continent after debuting at COP21 in Paris. Called "Lumières d'Afrique," the show centers on access to electricity and, more figuratively, ideas that enlighten. Emilie Iob reports from Abidjan, the exhibition's first stop.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8691
    JPY
    USD
    106.57
    GBP
    USD
    0.6891
    CAD
    USD
    1.2750
    INR
    USD
    66.589

    Rates may not be current.