Analysts from around the world are spending two days in Beijing, examining the impact the SARS disease is likely to have on the Asian economy. The workshop is a joint effort by the Boao Forum for Asia and the Asian Development Bank. Chinese government officials, economists from the World Bank, the Asian Development Bank and representatives from international organizations are taking part in the meeting.
The workshop has enough special guests participating to warrant medical staff in attendance. Every participant gets their temperature checked upon entry.
Top economists in China and Asia gathered to brainstorm ways to minimize the impact of SARS on the economy and agreed that the duration of SARS will determine the size of economic tolls.
Long Yongtu, secretary general of Boao Forum for Asia, said, " If SARS lasts only to the second quarter, there will be a 0.2 percent drop of GDP. If situation cannot be controlled and it lasts to the third quarter, there will be a 0.5 percent drop of GDP."
Signs of the SARS impact are emerging. Catering, tourism and transportation industries are feeling the pain. However, the economists at this workshop say the shock will be limited to only these sectors, and that the overall impact will be temporary.
Deepak Bhattasali, chief economist of World Bank Resident Mission in China, said, " SARS ... don't have persistent results .. it postpones purchasing, investment, but after it, sudden rush back to investment ... "
They say the investment environment of Asia, particularly in China, will remain unchanged given the strong fundamentals of cheap labor and huge consumer markets.
Ernst H. Behrens, chairman of European Chamber of Commerce, said, "In my capacity of EU Chamber of Commerce, investors have a much more long－term outlook. We are seeing very clear signs at the moment that the number of SARS are dropping. It will not have much impact on investment."
Optimism prevails at the workshop. But economists believe that the greatest lesson from SARS will be a learning experience for crisis － and economic － management. They also agree that the most significant aspect of that lesson is the crucial role of government.
Justin Lin, director of China Economic Research Center, Peking University, said, "I have four suggestions to the government, one is institutionalized respond to shocks, poor people will be taken care, improve our institutions ..., and carry out reforms."
Despite the uncertainties of the nature and development of SARS, participants are generally optimistic about the impact on the economy. But they also believe its implications for policy will be long－term with ramifications going far into the future.
(Xinhua News Agency May 14, 2003)
