Wednesday, June 3, 2009

PM cautious about a too rosy view of recovery

JEJU (SOUTH KOREA): Prime Minister Lee Hsien Loong yesterday cautioned against being too hasty in thinking the global recession has bottomed.

It will be a 'long haul ahead', he said, because there are structural issues that cannot be solved without considerable time and effort.

Mr Lee, who was speaking to leaders of Asean and South Korea, urged countries to work together in tackling the crisis and to continue reforms and consolidation.

In doing so, Asian nations can position themselves and the region to exploit the upswing when the economy recovers, he said at the summit here to mark 20 years of dialogue relations between South Korea and the regional grouping.

Mr Lee also called on countries that met at the recent G-20 summit in London to deliver on what has been committed and promised, in order to achieve progress in restoring stability and confidence to global markets.

At the April meeting, they agreed to raise the resources available to the International Monetary Fund (IMF) by US$750 billion ($1.08 trillion), among other measures.

Mr Lee's speech dwelt as well on the issue of climate change which, he said, needed urgent attention as measures introduced take a long time to show results.

Yesterday's session was the final one of the two-day summit and saw the completion of a landmark trade deal following the inking of an investment agreement.

The leaders also issued a joint communique that outlined, among other things, closer collaboration on expanding trade, fostering people ties and fighting transboundary challenges like climate change.

During his 10-minute address, Mr Lee first took stock of steps taken by governments and central banks worldwide in tackling the economic crisis.

In Asia, he cited the Chiang Mai Initiative Multilateralisation, a US$120 billion multi-currency Asian swap fund set up by Asean and its three dialogue partners, South Korea, China and Japan.

Said Mr Lee: 'This determined effort has calmed markets. Confidence is slowly being restored.
Some have even spoken optimistically of 'green shoots', though what's happening is that things are turning bad not as fast as before,' he said.

'I believe we should not be too hasty to pronounce that the recession has bottomed or that things are getting better.'

As he urged leaders to persevere with reforms, he also called on them to stand firm in one area: support of free trade. Keeping markets open is the best way to help everyone recover and grow, he said.

Such a course would also leave 'no reason for our trading partners not to do the same and to maintain their links and to develop their relationship with us'.

Mr Lee pledged that Singapore, in hosting the Asia-Pacific Economic Cooperation (Apec) Summit in November, will seek to boost growth in the region and also strengthen the interdependence and resilience of the Asia-Pacific area.

He said: 'And we are ready to work with G-20 members and with Korea as chair of G-20 to help keep trade flowing and markets open.'

As for climate change, Mr Lee called on countries to exchange best practices, suggesting that a good platform for discussing regional climate change issues is at the East Asia Summit Conference on Liveable Cities.

Last year, top officials from more than 30 cities in 16 East Asian nations exchanged such views at the meeting in Singapore, as part of the global effort against climate change.

'We invite Korea to consider hosting the next conference,' Mr Lee added.

He also welcomed South Korea's 'low carbon, green growth' initiative, which seeks to promote sustainable development in Asia, through developing new technologies.

'This is a very important approach because it will...make it feasible for us to reduce our carbon emissions while minimising the impact on our economies.'

Singapore also supports South Korea's newly launched US$200 million initiative to fund green activities in Asean countries, he added.

Mr Lee flew to Seoul yesterday for meetings with South Korean leaders.

Source: Straits Times, 3 June 2009

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