Asians should raid their savings and go shopping if the region wants to dodge the worst fallout from the global economic crisis, but analysts doubt entrenched saving habits can be broken.
As the global slowdown has spread across the region in the past few months, the call from economists for Asia to boost sluggish consumer spending has reached a crescendo.
"I think an important outcome of this global crisis is you will see Asia finally 'get the religion' of internal private consumption – the piece that was missing from the response to the financial crisis of 1997-98," Stephen Roach, chairman of Morgan Stanley Asia, said. Demand for goods from South Korea and Japan is collapsing, while even China's previously unstoppable export machine is stuttering.
Chinese exports fell 2.8 per cent in December for the second consecutive month -- the largest drop in a decade.
Asian Development Bank (ADB) Institute head Masahiro Kawai said the region needed people to open their wallets.
"Asia should remain the factory of the world, but Asians have to start consuming more. Asians have to start spending more," he said. There is little sign that stimulus packages and moves to boost spending have stifled the region's saving habits, the experts said. "It is hard to see Asia's consumers going on some sort of splurge," said HSBC's senior Asia economist Robert Prior-Wandesforde, who is based in Singapore. But that hasn't stopped governments across the region from trying. In Taiwan, the government dished out shopping vouchers worth $105 to each of the island's 23 million residents.
The government is still to release figures on whether the scheme has been successful, but Johnny Lee of President Securities in Taipei doubted it would help.
"I think most people will use the vouchers and put their own money in the banks," he said.
Similar scepticism was evident in Japan, Asia's largest economy, where the government has handed back $22 billion (Dh80.74bn), around $130 a person, to fight the recession. A recent opinion poll showed 44 per cent of people will use the money just to finance living expenses, followed by 18 per cent who plan to save it.
Government data showed Japan's household spending slumped 4.6 per cent in December year-on-year, the 10th consecutive month of decline, and a pattern repeated across Asia. South Koreans are hawking jewellery – even their wedding rings in extreme cases – to get extra cash. Office staff are taking packed lunches or using the company cafeteria rather than dining out.
The justice ministry is even considering cutting fines for minor offences committed by poor people because of the economic downturn. In Malaysia, the government has cut monthly contributions that workers must make to pensions, but there are doubts this will translate into ringing tills.