VIEWPOINT: Asia will need to look within region for growth this year

It's happening a continent away, but agencies in Asia are nevertheless nursing a bad case of deja vu. The late '90s collapse of the Thai baht and its domino-like impact on other regional currencies has returned with frightening clarity. And with it, shivers that a slowing US economy will drag the region down. Not that the US today is anywhere near Asia's crisis scenario of the previous decade, but jitters in the US have started infecting the still buoyant agency mood in this part of the world. So what's in store for Asia? Will the region's recovering economies have enough momentum to drive the turnaround? Or will the recessionary bug, which appears poised to draw blood from the American economy, do the same to Asia? Anecdotal evidence suggests this may already be happening. Regional titles have been looking thinner than usual. Publishers have however insisted that this has less to do with the US bug, but more to do with ad booking patterns that are in keeping with historical first quarter performance. Indeed, the feeling is that anyone talking about a slowdown only makes him or herself the target of ridicule. But is this nothing more than hubris? They may spout some of the most bullish lines around, but it is apparent that ad agencies have started toeing a more cautious line, staying well within budgets as they watch events in the US unfold. With lessons from the late 90s - highlighted by the dramatic collapse of BBDO's Hub - seared in Asia's collective memory, agencies don't want to be caught napping this time around should things take a turn for the worse. After all, it was only a year ago that Asia began its spectacular recovery from the slump. On the one side, ACNielsen and MindShare are optimistic that the region's adspend levels will continue to grow, albeit at more moderate rates. The worst case scenario calls for China to grow by just 20 per cent, down from 60 per cent last year. But doomsayers believe more harrowing times are in store for Asia. And their arguments do also carry plenty of weight. The last recession was Asia-created and it was the US which rescued Asia from a prolonged slump. This time round, the recession is likely to be US-created and there is no white knight to mount a similar rescue of the US or any other economy that falters in its wake. Which makes it imperative for companies here to look within the region for growth momentum. Admittedly that may sound like mission impossible. Japan is still tanking; its finance chief finally admitted that the economy was again creeping into recession. Despite several pump-priming initiatives, consumers have been unwilling to spend and this thrift mentality is not expected to change anytime soon. But surely, there is more to Asia than Japan. China appears relatively healthy, as do Hong Kong and Singapore. Korea has its problems, but vital signs are again relatively strong. So while it pays to be cautious, hopefully agencies and clients won't let the gloomy build-up affect them too much. Or we may find ourselves in a situation similar to the US, where perception more than reality is driving the economy to the brink.

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