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Asian governments – which have announced measures worth over $1 trillion (Dh3.6trn) – need to roll out fresh stimulus measures to stop their economies from sinking further as the region reels from collapsing exports, regional analysts said.
A calculation showed by AFP Asia has unveiled spending measures worth at least $1.1trn since October, when the financial meltdown that began in the United States home mortgage market exploded into a full-blown global crisis.
That total overshadows the $787 billion stimulus bill that US President Barack Obama signed last month in a bid to rebuild the world's biggest economy amid its worst crisis since the Great Depression in the 1930s.
Other than spending massive amounts to pump-prime economies, there is little else Asia can do in the short term, said Jan Lambregts, the Hong Kong-based head of regional research with Rabobank.
"There is no place to hide for Asia in a global recession," said Lambregts.
"There is a role for the government to act as a spender of last resort, so to speak, to soften the blow," he said.
"We are in a recession and this is about limiting the pain and making sure it does not spin out of control."
Unlike in 1997, during the Asian financial crisis, the region now has the "financial muscle" to fund government spending initiatives, he said. Asia's much vaunted export engine has virtually ground to a crawl as US and European consumers cut back on consumption.
The current gloom engulfing Japan, the world's number two economy, is also overshadowing its smaller but equally export-reliant neighbours.
Japanese manufacturers are badly hit by an alarming slide in sales of items like cars and electronic products. The country's exports almost halved in January from a year ago, while factory production fell by a record 10 per cent. Business investment chalked up its biggest decline of 17.3 per cent in the final quarter of last year.
There are plans for a third stimulus package of at least $200bn to rescue the Japanese economy on top of two spending programmes worth over $500bn announced late last year, local reports and officials said.
Rising giant China's top planner said the country stood ready to expand on the $585bn plan that was announced in November should the economy need further bolstering from the global downturn.
"Whether we want to increase investment, the decision will be based on the development of the situation," Zhang Ping, head of the National Development Reform Commission, said on Friday.
Hong Kong has so far not announced any major spending packages on top of measures like extra business loans and analysts expect Financial Secretary John Tsang to stick to the territory's conservative fiscal policy. Other export-driven countries such as South Korea, Singapore and Malaysia have unveiled spending measures and more should be on the way given the seriousness of the situation, said Dariusz Kowalczyk of financial trading firm SJS Seymour.
"I think the governments in Asia are surprised by the severity of the [global] recession and are realising that demand is incapable of recovering on its own," said the Hong Kong-based chief investment strategist.
In Singapore, the government tapped its vast financial reserves to help fund a stimulus package of more than $13bn. The city-state is facing its worst recession and chances of another stimulus package are high if the fortunes of the economy do not take a turn for the better, economists said.
The city-state's founding father Lee Kuan Yew said the economy may contract by as much as 10 per cent this year if exports continue to fall sharply.
In Indonesia, the parliament in February approved a $6.15bn stimulus package, while Thailand plans to spend $54bn over four years to stimulate an economy also hit hard by domestic political upheavals.
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