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No threat to Asian economies: Jeffrey Sachs

Kuala Lumpur: American economist Professor Jeffrey D. Sachs sees no threat to Asian economies in the wake of the developments in the international stock markets.

Addressing the media here on Friday, Professor Sachs said Asia would be buffered from any financial crisis in the near term, as the region’s central banks had sufficient reserves to prevent a liquidity crisis, he observed, according to the New Straits Times published from here.

Compared to the crisis 10 years ago, the central banks in the ASEAN region now have $3 trillion foreign exchange reserves, he noted.

Any crisis this time will be more of a threat to the United States than to other parts of the world, with many economies having de-coupled from the U.S. economy. The U.S. fiscal policy had been irresponsible and greedy; the rich wanted to have tax cuts and the whole war had been financed by borrowings rather than domestic taxation. “It would not surprise me if we face some slowdown as a result of this,” he said.

Professor Sachs addressed a luncheon meeting in connection with the 40th anniversary of the Economic Planning Unit of Malaysia. He commended the country for its development success in combining rich tropical resources and an ethnically diverse society.

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