ASEAN SHOWS MIXED PERFORMANCE IN 1986
A sharp oil price decline and sharp
fluctuations of exchange and interest rates in 1986 produced a
mixed economic performance by the Association of Southeast
Asian Nations (ASEAN), a United Nations study said.
    The annual report of the U.N. Economic and Social
Commission for Asia and the Pacific (ESCAP) said the
international economic environment reversed the fortunes of the
trade-oriented economies of the six ASEAN member countries.
    It said the already low 1985 growth rates of ASEAN's oil
exporting countries -- Brunei, Malaysia and Indonesia --
dropped further after the oil price fall.
    Three oil importers -- Singapore, the Philippines and
Thailand -- improved their performance mainly by restructuring
their economies. But the report said the oil price fall reduced
export earnings, worsening economic prospects for the
exporters.
    The exporters' non-oil commodity prices did not show major
improvement and protectionist pressures from industrial
countries restricted export of manufactured products, it said.
    The GDPs of Indonesia, which was 1.9 pct in 1985, and
Malaysia, which fell a real one pct, barely grew in 1986.
    The two countries, buffeted by unfavourable external
factors in the past few years, were forced to curb aggregate
domestic consumption demands last year to avoid severe balance
of payments pressures and to resort to extensive commercial
borrowings.
    The U.N. Body said the economic outlooks of Singapore,
Thailand and the Philippines improved steadily in 1986 as the
year advanced. It said the most favourable factor benefiting
the three was the realignment of key currencies, especially the
appreciation of the yen, which has resulted in the increased
competitiveness of their exports against those from Japan.
    The report said the downward spiral plaguing the Philippine
economy since 1983 was reversed into an estimated 0.9 pct GDP
growth in 1986 with agriculture and public utilities becoming
growth sectors.
    It said the resumption of the Philippines' sustained growth
rests largely on a satisfactory solution of its debt problem.
    ESCAP said the yen appreciation, together with economic
restructuring measures, played a big role in helping Singapore
recover faster than expected from its 1.8 pct GDP decline in
1985.
    It said the Singapore GDP achieved a growth of over one pct
last year after registering positive growth from the second
quarter.
    The Singapore economic revival was hampered by its own
adjustment measures especially its two-year wage freeze
enforced last April, a glut of its property market and
depressed conditions in its ASEAN neighbours which hurt
Singapore because they take about a quarter of its total
exports.
    The report said Thailand benefited from the changing world
economic environment far more than any of its ASEAN neighbours.
    The Thai performance stemmed from the expansion o its
non-traditional export items last year to cover more
manufactured products and its greater exploration of
unsaturated export markets such as Asia, the Middle East and
the European Community.
 REUTER
