East Asia's policy-makers are 'reeling in shock' from the economic turmoil that has gripped the region, says the permanent secretary to Singapore's Ministry of Foreign Affairs.
Kishore Mahbubani told the World Economic Forum yesterday it could take up to 18 months for the region to bounce back from the upheaval in currency and equity markets.
He said: 'The economies of Asia hit the wall and are gobsmacked about what has happened. It has come as a shock. Clearly, when you have such a major hit you must sit back and reflect on what has gone wrong.' Mr Mahbubani attributed East Asia's stability to the Association of South East Asian Nations (Asean) but said the region had reached a defining moment.
Britain's former deputy prime minister Michael Heseltine said a period of closer co-operation between countries was inevitable.
'The power of the nation-state has been significantly eroded. Sovereignty is as real as it ever was but the ability of the nation-state to exercise it is increasingly limited.
'Nations have to compete with the economic benefits on offer [in other countries] if they are to satisfy their constituencies.'
