US meltdown may result in Asian recession, group says

(Update) MANILA, Philippines - The US meltdown is likely to result in an Asian recession, cutting growth for countries like the Philippines, a non-government group said.

“Since China’s main foreign market is the United States," China may be prompted to buy less imported goods from Japan, Korea, and southeast Asia owing to a demand cut in the world’s largest economy, said Walden Bello, Freedom from Debt Coalition (FDC) President, during a Quezon City briefing.

Lower appetite for Asia’s exports—including the Philippines’ electronics products—are expected to reduce growth expectations of the region’s economic tigers.

Besides saying that “decoupling" from the crisis is “impossible," Bello said that the US, China, and East Asia are “like three prisoners bound together in a chain-gang."
Asserting that “neoliberal restructuring, globalization, and financialization" as the causes of the US subprime crisis, Bello said that the meltdown is just the latest in a series of 100 financial emergencies “ever since capital markets were deregulated and liberalized in the 1980s," citing a report made by the Carnegie Endowment.

“Prior to the current Wall Street meltdown, the most explosive of these were the Mexican financial crisis of 1994-95, the Asian financial crisis of 1997-1998, the Russian financial crisis of 1996, the Wall Street stock market collapse of 2001, and the Argentine financial collapse of 2002," Bello said.

“The worst is not yet over," Bello said while showing his slideshow presentation entitled “Wall Street: The Causes of Collapse."

“If anything is clear from the contradictory moves of the last week, there is no strategy to deal with the crisis, just tactical responses, like the fire department’s response to a conflagration," Bello said. He referred to the US government’s moves that allowed Lehman Brothers to collapse while “taking over AIG and engineering Bank of America’s takeover of Merill Lynch."

“The $700 billion buyout of banks’ bad mortgage-backed securities is not a strategy but mainly a desperate effort to shore up confidence in the system, to prevent the erosion of trust in the banks and other financial institutions and preventing a massive bank run such as the one that triggered the Great Depression of 1929," Bello said. - Robert JA Basilio Jr., GMANews.TV