MM Lee: Asia can't bank on its own

May 23, 2009

NIKKEI CONFERENCE

Asia can't bank on its own

Recovery only when Americans start spending, says MM

By Kwan Weng Kin, Japan Correspondent
		Mr Lee said it was fortunate that Singapore has accumulated huge reserves that should see it through this recession, even if it were to last five years. -- PHOTO: AFP

TOKYO - MOST Asian economies are unlikely to see a consumer-led recovery as it will take a long time for Asians to raise their level of consumption, Minister Mentor Lee Kuan Yew told an international conference here on Friday.

ON HIS BEING STILL ACTIVE IN HIS 80s AND THEREFORE AN INSPIRATION TO JAPAN'S ELDERLY 'My contemporaries, many of them no longer are in this world. Some of them who are, are in wheelchairs or are not ambulant. So please do not take me as the norm.' ... more

He was speaking during a dialogue with Japan Foundation president Kazuo Ogoura on the final day of the two-day Future Of Asia conference organised by the influential Nikkei business daily.

For Asian economies to switch from low consumption, high savings and high investments to become a high consumption society like the United States 'will be a long process of decades', said Mr Lee.

Speaking at a dinner for conference participants on Thursday night, Japanese Prime Minister Taro Aso had called on Asian states, which were dependent on exports for growth, to change to economies led by domestic demand in order to overcome the current economic crisis.

But the Minister Mentor said: 'I do not believe that in the short term there can be any change in a consumer-led recovery of these Asian economies.'

Even if Asians were to increase their consumption in the long term, as they become more confident of the future, they are unlikely to ever equal the US, whose gross domestic product is 70 per cent dependent on consumption, he added.

'The Americans believe tomorrow will always be a sunny day. The Chinese always believe tomorrow there may be an earthquake. So do the Japanese. So let's put something by.'

Because the world is already globalised, most countries, including Japan and Germany, will depend on an American economic recovery for their own economies to pick up, he said.

'When the American economy goes up by 1 per cent, I think the wheels will start turning again,' he added.

But he pointed out that two countries - China and India - could grow even though the US economy was down.

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