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THE ASIA BOOM : Expanding Horizons

November 29, 1994

As growth in China soars, other Asian nations are being swept along in its wake. China has been recording 10% annual growth. Thailand and South Korea expect increases of about 8% in their gross national products next year. And with burgeoning business comes a need for improved infrastructure. From New Delhi to Manila, from Malaysia to Japan, the next decade will bring new roads, better communications and increased power supplies as infrastructure becomes a priority to governments and private industry alike. Already the Asian skyline is filled with construction cranes, whether building dams in India or a power plant in Indonesia.

Infrastructure is essential to continued economic development. Economists have found a direct link between investment in it and a country's wealth. Even a nation such as Vietnam, with virtually no modern industry, is forecasting that it will have to spend $500 million a year to meet its electricity needs. But such massive development projects cost more than most Asian governments can afford.

The solution, as pioneered in the Philippines, may be to privatize the infrastructure improvements. Besides having the capital to invest, private companies tend to do the job faster and more efficiently than government-owned companies. All that construction should be good news for the United States because many U.S. companies--telecommunications giants such as Nynex Inc. and power suppliers such as General Electric--are well-positioned to profit from the boom.

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