Asia could help the global economy recover before the end of 2009 if leaders work together, the former chief of the International Monetary Fund (IMF) said yesterday during the 7th Chief Executives Forum of the Management Association of the Philippines.
IMF former managing director Michel Camdessus said the global economy may still grow by three percent this year and in 2009, the same as in the previous decade, to be spurred by growth in Asia as the United States and Europe are no longer the engines of growth.
“I have no doubt that this period of stress will be over,” he said, adding that if countries coordinate properly, recovery could be on its way before the end of next year.
The Philippines, he said, can weather the crisis through its entrepreneurs’ dynamism and creativity.
“This is the hour of the Philippines. Your country now has in its hands the elements of change,” he said.
Camdessus said this is “the age of entrepreneurs” wherein private sector leaders can help formulate new policy directions that would help spur growth.
“I don’t expect Asia to go on recession,” he added.
The former IMF chief said that entrepreneurs should go back to the basics and practice ethical values such as through corporate social responsibility activities.
However, he said Asian countries such as the Philippines could also be negatively affected by the crisis through lesser activities in the export industry. The US is the country’s largest trading partner.
“This does not mean that Asia will be fully sheltered from the financial turmoil but conceivably, we shouldn’t lose sight of the environment here. We have entered the age of entrepreneurs,” he said.
He said that in the Philippines, the implementation of fiscal reforms would allow for more social services and infrastructure spending. This, he said, would further enhance investor confidence in the country.
However, Camdessus believes that the availability of credit to economies including the Philippines would be affected by the ongoing financial turmoil in the US.
He attributed the financial meltdown in the US to greed and the absence of adequate regulatory measures on certain sectors.
Two weeks ago investment banks Lehman Brothers and Merrill Lynch announced that they had gone bankrupt, while US insurer American International Group filed for bankruptcy. These developments have reverberated beyond American shores, sending jitters to investors across the globe.