Singapore, Japan and Hong Kong are already in recession, Taiwan and South Korea are teetering on the edge, and China is slowing fast.
Already hundreds of factories have closed down and thousands were laid off.
How will Asia ride out this economic downturn?
In this video, a panel of economists examined the matter. A key point raised is that countries need self-sustainable domestic market as foundation before moving into the global market.
"Not expecting a significant turn around until somewhere around 2010."
Louis Kuijs, World Bank
"Crisis happened so fast because of the rush toward global integration of market and production."
Prof Walden Bello, Political Economist
"China will turn around by end of 2009."
Cyrus Daruwala, Financial Insights, Asia Pacific
Need to rethink the globalization paradigm and refocus economy back to domestic and regional markets.
In June 2007, OECD said economic condition was best in years and two months later the crisis began.
Self-sustainable domestic market vs globalization
Globalization offers countries the opportunity to grow their economy beyond the limit of their domestic market. However, the economic integration exposes them to the economic turmoils of their trade partners. A self-sustainable domestic market can provide a level of resilience to help weather the economic crisis.
While most of the ASEAN nations have self-sustainable domestic market , Singapore lacks the resources and is too small to do the same. Instead, the government signs trade agreement and explores trade partnership around the world as a n alternative to diversify the risk.
Singapore's two biggest export destinations of Europe and the United States are in recession, while China, its third largest market, expanded at the slowest pace in seven years last quarter.
'We are plugged into the markets that are largely in the rich countries and when we go through a global crisis like this, we come down very quickly,' Mr Tharman said, adding that there was no Asian domestic demand to provide a cushion for Singapore.
S'pore's growth model works, says Tharman
January 30, 2009
Should Singapore adjust its economic model? In what way and how?