East Asia: The Recession Arrives
Article Summary and Author Biography
By contemporary standards, 1982 was another year of economic and political success for most East Asian nations, although a distinctly modest one when compared to achievements of recent times. Their diverse economies continued to grow, in contrast to those of most developing and industrialized nations in other areas. No governments were toppled or seriously endangered by civil strife. No new external security threats appeared, nor did any East Asian country end the year with a significantly increased sense of national jeopardy.
Robert Keatley has been Editor of The Asian Wall Street Journal since 1979. He was previously Foreign Editor of The Wall Street Journal, its diplomatic correspondent in Washington, and bureau chief in Tokyo and Hong Kong. He is the co-author of China: Behind the Mask.
By contemporary standards, 1982 was another year of economic and political success for most East Asian nations, although a distinctly modest one when compared to achievements of recent times. Their diverse economies continued to grow, in contrast to those of most developing and industrialized nations in other areas. No governments were toppled or seriously endangered by civil strife. No new external security threats appeared, nor did any East Asian country end the year with a significantly increased sense of national jeopardy.
Both internally and externally, the nations of East Asia thus avoided crisis and confrontation, and preserved the region's current reputation as one of relative calm in a world all too often wrestling with small wars, insurrections and the specter of economic failure.
Yet the successes were indeed modest by recent standards. After hovering in the distance, the worldwide recession finally hit the region with force, bringing sharp declines in growth rates from South Korea to Indonesia. Exports suffered as the main markets of North America and Western Europe declined, or at least failed to expand much. Those nations which rely most heavily on commodity shipments for national revenue were hardest hit; declining prices for such items as petroleum, tin, palm oil and coconuts damaged the expectations of several national treasuries. Some countries have, therefore, cut back development spending, revised growth projections downward, and in general prepared for leaner days just ahead. Uncertainty is replacing the confidence of recent years.
Moreover, Asians have turned more heavily to the international capital market for funds as trade and payments deficits loom. An ingenious collection of financing methods, including syndicated loans, bond issues, special financing facilities and assorted floating-rate instruments, are being devised to attract bank funds in the billions. This is pushing long-term debt in several countries higher than seems comfortable to their generally conservative financial officials-especially in South Korea and the Philippines-though not high enough yet to threaten any Asian governments with the burdens of a Mexico or Argentina...
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