Private-sector investment in the five Asian economies hit hardest by the regional eco nomic downturn plummeted last year, with expectations of a continuing decline this year, the Institute of International Finance (IIF), a global association of financial institutions, says.
It estimates private capital flows to Indonesia, the Philippines, Malaysia, South Korea and Thailand fell from US$93 billion in 1996 to $12 billion last year.
But investment in other leading emerging market economies - including Asia - last year rose by $10 billion to $212 billion during the same period.
IIF chairman Georges Blum said: 'It is remarkable that in these circumstances, flows to all other major emerging markets actually increased, demonstrating that contagion in flows has been limited.' The IIF, which represents 280 financial institutions, estimates that the total net private capital flow to the 29 leading emerging-market economies last year was $199.6 billion, a fall from the previous year's record $295 billion.
This year's projected total, covering both direct and portfolio equity, is about $171.5 billion.
Equity flows accounted for about 65 per cent of total net private flows last year.
During the year, the Asian equity crisis triggered a huge increase in public equity flows into the region.
