SINGAPORE -- "Bailout" is back as a buzzword 11 years after the Asian financial crisis, but this time the tables are turned: the US is scrambling to rescue ailing banks while a healthy Asia watches.
The ramparts built after the 1997-1998 Asian crisis helped blunt the impact of turbulence that ripped through America's financial heartland this month, economists said.
Asian stock markets plunged after a wide-ranging shakeup on Wall Street that included the bankruptcy of investment bank Lehman Brothers and the takeover of its counterpart Merrill Lynch.
Economists say Asia's exports are expected to take a hit, leading to slower economic growth this year and in 2009.
But the region is now on a stronger footing than in years gone past, they add.
"Asia will not be able to avoid some impact for sure," senior Asian Development Bank (ADB) economist Cyn Young-Park told AFP, adding she did not think the US financial turmoil can cause a severe crisis similar to 1997.
"So far, emerging Asia has been weathering the storm relatively well."
International Monetary Fund (IMF) managing director Dominique Strauss-Kahn said in an interview with The Straits Times newspaper that Asia was "doing rather well."
Starting from a high growth rate, "it is not surprising that most Asian countries are in better shape," Strauss-Kahn said.
Manila-based ADB said Asia's developing countries should grow 7.5 percent this year and 7.2 percent in 2009, down from 8.7 percent in 2007 but still considered respectable.
China's growth is likely to come in at 10 percent this year and 9.5 percent in 2009, ADB said.
A currency meltdown plunged Asia into crisis in 1997, sending some of the region's key economies into recession.
The World Bank, IMF and ADB led multi-billion-dollar bailouts to rescue the stricken economies, and pushed for financial sector reforms. The reforms led to stricter financial markets regulation, a clean-up of bad bank loans, greater cooperation among central banks and a swap arrangement that pools the region's massive foreign exchange reserves to defend against currency speculators.
Economists said those reforms, bigger risk management awareness as well as monetary and fiscal prudence have helped cushion the impact of the US-induced turmoil more than a decade later.
Now the United States government has proposed its own bailout of up to $700 billion to purchase tainted mortgage-related assets at the root of the latest crisis.
"There is no doubt that the huge improvement in economic fundamentals over the past decade has helped Asia weather the current crisis better than any in the past," Mark Williams of London-based research house Capital Economics told Agence France-Presse.
Asian economies currently have strong reserves to protect their currencies and enjoy low levels of foreign debt, while domestic demand will drive growth in the region's bigger economies such as China and India, he added.
"Unlike the build-up to the Asian financial crisis of 1997, there are currently no signs of current account deficits," said Bruce Tolentino, director for economic reform at the Asia Foundation, a non-profit group.
Peter Redward, chief Asia economist at British bank Barclays, said Asia's banking sector remains healthy.
"We think that this region's financial sector is likely to have some pressure put on it by the global environment but fundamentally we don't see significant problems emerging," he said.
But the region is not totally shielded "because Asian economies are very closely integrated with the global trade system", said Jan Lambregts, Asia research chief at Dutch lender Rabobank.
Singapore, for example, may slip into a technical recession in the third quarter due to falling exports, according to economists.
"Export growth has held up pretty well so far for much of the region, but it is likely to tail off as the extent of the economic problems in the West becomes clearer," Capital Economics' Williams said.
In case of a major US recession, exporters of high-tech products, namely South Korea, Singapore and Taiwan, will be the most vulnerable, said Tolentino of the Asia Foundation.
Countries with large garment and textile sectors that export to the US and European markets will also be at risk, he said.
Asia's developing countries supply about two-thirds of US clothing imports and 85 percent of its footwear, ADB said.