ASEAN KEY DESTINATIONS
A tale of two different regions
By David Swartzentruber
After seeing his austerity program rejected by the Portuguese Parliament, departing Prime Minister Jose Socrates in a televised address requested economic aid from the European Commission to the tune of 70 billion euros (US$100 billion) to pay the country’s debts.
Meanwhile, the Asian Development Bank (ADB) said Asian gross domestic product would ease to 7.8 percent from 9 percent in 2010, as the Chinese and Indian economies ease.
In line with the daily news reports published by Asean Affairs, the ADB said inflation posed a threat and “higher oil and food prices could "shake developing Asia's macroeconomic stability" and cause widening income inequality and "potentially lead to social tension".
The bank suggested that more flexible exchange rates could help countries with "with persistent current account imbalances and misalignment between their exchange rate and fundamentals.” A remark aimed at China, as many feel the Chinese yuan is quite undervalued.
The ADB said a set of economic indicators agreed to by the Group of 20 leading economies in February also could "provide useful tools" for developing Asian economies to deal with inflation and capital inflows.
The contrast is striking between the East and West.
European countries struggle to resolve debt, the United States struggles to pass a budget and Asia tries to deal with continuing capital inflows and rising inflation.
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