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Asia may bounce back this year, exec says

The continent's dependence on its electronics sector has hurt its economy, but things could turn around soon, Deutsche Bank Asia Pacific's chairman says.

SINGAPORE--Asia's dependence on global demand and its electronics sector has slowed down the region's economy, but things could turn around in the second half of this year, according to Deutsche Bank Asia Pacific's chairman.

That's because Asian countries have kept their economic fundamentals in check and are now "in much better domestic balance," Hubert Neiss, who is also the former director of the Asia Pacific department of the International Monetary Fund, said this week.

He noted that all Asian countries have significantly reduced "short-term external debt" and that the "banking systems are in better shape." As for Asia's heavy dependence on the electronics industry, which took a plunge in the later half of 2000, Neiss noted that the decline is cyclical and, thus, temporary.

According to Deutsche Bank Research, about 65 percent of Singapore's exports last year came from the electronics sector. In the Philippines and Taiwan, it was about 60 percent. In South Korea, it was around 40 percent.

Asian governments must ensure their economies are on the right track to better growth, Neiss said. They must "continue to support and boost domestic demand in the absence of foreign demand...by means of effecting monetary and fiscal policies," he said.

"The Asian economies must also continue with their structure of reform, particularly in the financial and external liberalization policies."

CNET Singapore's Nawaz Marican reported from Singapore.