World Bank: East Asia Shows Recovery, but Remains Uneven by Truong Hong Khanh 24-2-2000 East Asia enters the new millennium as the world's fastest growing emerging market, a remarkable turnaround from the devastating crisis that began in 1997, according to the World Bank's regional first quarterly brief of 2000. The report provides detailed analysis for seven of the region's most important economies, including China, Indonesia, South Korea, Malaysia, Thailand, the Philippines and Vietnam. It indicated that in 1999, the region's economy grew by about 5 percent. South Korea, China, and Malaysia led the group with growth rate of 10.2 percent, 7.1 percent, and 4.9 percent. Although Indonesia lags behind, it too showed signs of positive growth. This economic turnaround brings the region back from rising poverty, falling standards of living, and the systemic crisis in its productive and financial sectors, the World Bank said. The bank, However, noted that incomes to low and middle class citizens had yet to be restored, and the 15 million or so people that the crisis pushed below the poverty line remained unaffected by these economic improvements. In fact, the improvements were felt by mainly the economic and political elites.  "East Asian economies are clearly on the mend, but a good deal of challenging work remains to be done," said Jean-Michel Severino, vice president for World Bank's East Asia and Pacific Region. The update projected that real gross domestic product for the region should remain at around 5 percent in 2000, and exports should continue to rise. "The external environment continues to provide a favorable context for East Asia's recovery, though not without risk. The global economy has picked up its pace, led by the United States' strong fourth quarter performance and Europe's gathering momentum, " said Richard Newfarmer, lead specialist in the World Bank's East Asia and Pacific Region. "All in all, East Asia is beginning the new year with enviable prospects, and equally impressive challenges," he said. Thailand on Right Track: IMF Meanwhile Thailand's formal exit from the economic reform program with the International Monetary Fund (IMF) will not happen until June 2000, yet IMF officials agreed that Thailand was by February 2000 out of the crisis and no further assistance was necessary. IMF officials during the first week of February concluded their quarterly review of Thailand's economic policies. Ranjit Teja, IMF division chief for Thailand, was quoted as saying that with growth firmly on track and foreign reserves strong, the country had no further need to access fund facilities. He said the Thai economy was likely to perform strongly in 2000 due to export recovery, higher consumer demand and expanding production. In fact, the economic improvement in Thailand had been so strong in the previous few months that the IMF was considering revising its growth forecast for the Thai economy in 2000 to "closer to five percent"from around four percent previously, Teja said. However, he warned, non-performing loans (NPLs) would have to come down faster to ensure a sustained recovery. Thailand asked for IMF assistance in August 1997, accepting a 17.2-billion-U.S.-dollar standby credit program after exhausting foreign reserves in a failed effort to defend the baht. By the end of January, some 14 billion dollars had been drawn from the program.The Thai government was scheduled to make the first repayment of the loans in November 2000, with a 200 million dollars payment to the IMF. In the following year, loan repayments were estimated at three billion dollars,with 1.2 billion dollars due to the IMF. Thai Finance Minister Tarrin Nimmanahaeminda said no further drawdowns would be made from the IMF. He said no new letter of intent was necessary, as existing policies and measures were deemed sufficient. "There is nothing we need to change for our current policy. The key rather would be on implementation of our policy," Tarrin said. He said consultations between the IMF and Thai officials in the future would still be held annually, similar to those held with other fund members.