Global restructuring and the future outlook of the Asia-Pacific economy

Abstract

The Asia-Pacific region is at a critical conjuncture in modern world economic history. In the recent past the world economy had experienced drastic fluctuations in exchange rates, particularly of the US dollar against the Japanese yen and other major currencies. The stock market crash of October 1987, on top of the unresolved Third World debt problem, had signalled a crisis in the world financial system. The continuing restructuring in the advanced industrialised countries, as the US grapples with its persistent twin deficits, and Europe seeks to reindustrialise and reduce its unemployment overhang, and the prevailing mood of protectionism across the world add to instability and uncertainty in the world economy. In this maelstrom of global structural adjustments, the Asia-Pacific economy, centred around Japan and the East Asian newly industrialised countries (ANICs), represents a focal point of high growth and economic ascendancy. Japan leads this strong performance in spite of the rising yen, followed closely in her footsteps by the Asian NICS in generating a tremendous trade surplus with the West. The resource-rich ASEAN countries, accomodating to the collapse of the commodity boom of the seventies, have now begun to recover and push into a second phase industrialisation.