East Asia will weather U.S. slowdown but economic reforms needed: World Bank

BEIJING (AFX-ASIA) - East Asia will weather the slowdown in the U.S. economy and the impact of slowing technology demand but continued reforms are needed to avoid another regional downturn, the World Bank said.	    Most countries in the region should see 3-7 pct GDP growth this year, Jemal-ud-din Kassum, the World Bank's vice president for the East Asia and Pacific region, said at a news conference where he released the bank's half-yearly report for the region.	    "We believe that this year 2001 will be the third consecutive year of steady growth for the region's major economies following the financial crisis of '97 and '98, confirming the view expressed last year that recovery was well underway," Kassum said.	    Two of the region's largest developing countries, China and Indonesia, are expected to see GDP growth of 7.3 pct and 4.0 pct respectively in 2001.	    This compares with 8.0 pct for China and 4.8 pct for Indonesia last year.	    The World Bank plans to spend 2 bln usd this year in new loans for 35 projects to strengthen the investment climate and reduce poverty in East Asia, he announced.	    Despite predicted slower growth in the region, prospects for a prolonged regional slump were slim.	    The countries in East Asia were in a much stronger financial position than they were four years ago at the start of the Asian financial crisis.	    Real wages are competitive and the export and electronic sectors have accumulated profits and savings, he said.	    Current account surpluses and international reserves are also higher.	    But Kassum warned the pace of reform in the region must be sped up. The slow pace and "questionable quality" of financial and corporate restructuring was diminishing both foreign and local investor confidence.	    Governance, judicial and public sector reform are looming as more difficult challenges than anticipated.	    "Progress in all three areas is critical to investor confidence and to sustainable growth and recovery," Kassum said.	    Banking and corporate restructuring remained urgent priorities, he said. 	    "The prospect of a slowdown should send a signal to all policy makers across East Asia and the Pacific that the region has a large and unfinished reform agenda," Kassum said.	     Only steady, sustained progress in the key areas would attract sufficient investment to create the jobs needed to lift people from poverty, he said.	    Although poverty levels had fallen almost to pre-crisis levels, nearly half the population of East Asia is living on less than 2 usd a day, Kassum said.    

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