Global Economy Expected to Suffer Further in 2009

Goh Chok Tong, Singapore's Senior Minister, at the Asia Society Hong Kong Center's Annual Dinner on Nov. 11, 2008. (Nick Mak/Asia Society)

HONG KONG, November 11, 2008 - Singapore's Senior Minister Goh Chok Tong acknowledged that economic growth around the world has already slowed down due to the financial meltdown that began in the United States, and warned that next year, many economies will likely fare worse.

Addressing an audience of more than 500 guests that included government officials and business and academic leaders at the Asia Society Hong Kong Center’s Annual Dinner, Goh said the priority for goverments now was to deal with the immediate problems caused by the economic slowdown. The minister, who is also Chairman of Singapore's Monetary Authority, noted that "It is the essential role of government to supply the institutions that create and sustain trust in financial promises."

In his keynote address entitled “Governance and Growth in Emerging Asia," Goh attributed the current financial crisis to lax oversight and regulation of the American housing mortgage market and the unrestrained growth of complex, high-yield but high-risk products such as derivatives, structured products, and collateralized debt obligations.

While no region has escaped unscathed from the current financial mess, Goh said, most of the East Asian banking systems have not been as badly affected as financial institutions in the United States and Europe.

"We have learned the painful lessons of the 1997 Asian financial crisis," he said, adding that "I believe when the dust settles, most emerging East Asian economies will be set to resume strong growth." Goh underscored, however, that “It will take a while before markets calm and global growth resumes."

Goh served as Singapore’s second Prime Minister between 1990 and 2004, steering his country through several challenges, including the 1997 Asia financial crisis, the post-September 11 terrorist threats, an economic downturn from 2001-2003, and the SARS outbreak in 2003.