Is ASEAN Resilient from Euro Debt Woes?

A World Bank economist declares ASEAN as "resilient" to the shocks from the Eurozone

Reports the Bloomberg,

Economies in the Association of Southeast Asian Nations are “resilient” to Europe’s sovereign debt woes, with governments having room for monetary and fiscal policy changes, World Bank Managing Director Sri Mulyani Indrawati said.

“For countries, especially Asean countries who are very resilient to the crisis, they still have the ability to maneuver from their own policy space, whether this is on a fiscal side or a monetary side,” Sri Mulyani said in an interview in Tokyo yesterday. “That’s very important.”

Asian policy makers are under renewed pressure to support growth as the world grapples with the threat of a Greek exit from the euro. Greece’s political impasse has deepened the European crisis and sent Asian currencies and stocks tumbling, adding to the uncertain outlook for exports and growth.

Really?

The panic in the Eurozone have partly incited the slump in global equity markets. Europe’s Stox50 has led the recent market rout which spread to ASEAN (ASEA) and other global benchmarks, such as the S&P and Emerging Markets (EEM).

I say “partly” because it would seem misguided to fixate solely at the Eurozone as the key contributing factor in driving the conditions of the global financial markets, as well as, the global economy.

The overall doldrums of global equity markets, possibly includes the China factor and perhaps uncertainty over US monetary policies and or US politics among many others

Yet the transmission from current shocks has likewise become evident in the region’s currencies. The the ringgit, the peso, the baht and the rupiah (left to right) have been conjointly whacked.

Add to this picture, the weakening of global commodity prices.

In short, seen from the actions of financial markets, there hardly has been evidence to support claims of “resiliency” or innuendos of “decoupling”.

Of course, actions in the financial markets may not exhibit the performance of the real economy as had been the case of 2007-2008.

But my point is that it would seem as an appeal to the heuristic and oversimplification of analysis to project on so-called 'resiliency' when the extent of uncertainty have yet to be identified and ascertained in today’s complex and vastly interconnected world.

As the great Professor Ludwig von Mises explained,

Economics does not allow of any breaking up into special branches. It invariably deals with the interconnectedness of all the phenomena of action.