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Taiwanese Economy Expands - 2002-08-19

Taiwan's economy expands while a much-hyped stock market venture in Japan prepares to shut down.

The money-losing Nasdaq Japan Stock Market is going out of business. It will cease operations on October 15 because of what Nasdaq officials describe as bad timing and poor market conditions.

The venture, founded by the U.S. Nasdaq, the Osaka Securities Exchange and other corporate investors, has lost more than $44 million since its inception in 1999.

The market was created to trade shares of international companies and Japanese technology start-ups but failed to attract investor interest amid Japan's dragging economic slump. Osaka Securities Exchange President Goro Tatsumi told reporters that the agreement with U.S. Nasdaq will end without dispute.

The 98 companies now listed on Nasdaq Japan will in the future list on a section of the Osaka stock market called the Japan New Market.

Indonesia's government will slash subsidies on utilities and food to help cut the government's gaping budget deficit. It will also raise electricity prices and continue selling off state-owned assets.

President Megawati Sukarnoputri told Parliament that the move is designed to reinforce economic stability and increase international confidence in the country's economy.

The steps are in line with suggestions from the International Monetary Fund, which is overseeing a five-billion dollar loan program for Indonesia.

In Taiwan, second quarter economic growth has exceeded expectations. In the April to June period, the island's gross domestic product grew by nearly four-percent from a year earlier as exports strengthened.

But economists warn that if the U.S. recovery slows, it could derail that momentum. The United States is the top destination for Taiwanese goods, which are mostly high technology products.