Country risk September 1999: Daring to hope, fearing the worst
The emerging markets are bouncing back - at least some of them are. While they do, the market is holding its breath as crisis-hit countries implement fiscal and monetary reforms. And while economists believe growth rates will improve, they are also resigned to sovereign defaults on foreign debt. Commentary by Rebecca Cicolecchia, research by Alexa Marx.
According to the latest Euromoney country risk ranking, the key Asian economies have turned the corner. The region has made the necessary adjustments to regenerate growth, broadly benefited from new-found currency competitiveness and has begun to attract investors again, as governments, banks and corporates push ahead with restructuring plans. However, the scale of the challenges ahead is reflected by these countries' modest rebound up the rankings. Political commitment to wholehearted reform is still in question.
Malaysia turns the corner
Economists and analysts are particularly positive about Malaysia. It climbs 12 places to 46, making the country one of the highest climbers in the whole survey. For economic performance alone, it rises 28 places to 46, with GNP growth forecasts of 3.4% over the next two years. Attitudes to prime minister Mahathir's monetary policy have softened somewhat, now the ringgit is pegged to the dollar. South Korea, the Philippines and Thailand also do well.