MANILA, Philippines -- The economic slowdown across Asia has shown that the region is still heavily dependent on the financial health of the world's major economies, the Asian Development Bank (ADB) said Tuesday.

The bank also warned in an update to its annual Asian Development Outlook report that if the slowdown extends beyond 2009, the repercussions for the region could be "severe."

"The myth of uncoupling has been exploded," the Manila-based lender said.

"The region clearly remains heavily reliant on industrial countries for its exports and has not uncoupled from their business cycles."

The statement refers to the widely held view that Asian economies are now strong enough to rely on intra-regional trade rather than the so-called G3 (the United States, the euro zone and Japan).

The ADB said the global downturn was expected to be long and drawn out, meaning exports from Asian countries would be "sluggish."

Developing Asia supplies about two-thirds of US clothing imports and 85 percent of its footwear both in terms of value and volume.

The bank said exports from the region in these sectors had contracted in the first half of the year.

Asia is also a major supplier of toys, games and sports equipment to the United States.

"As the region almost completely supplies the US import market for these goods, a prolonged weakening of demand could adversely affect developing Asian manufacturers," the ADB said.

And the story is much the same for Japan and the euro zone.

The bank also said the "loss of investor confidence in industrial countries? equity markets has crossed over to Asia."

"The risk premium on dollar-denominated offshore bonds of Asian issuers has risen sharply since the outbreak of the subprime crisis in the United States," it added.