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Currency crisis affects Asian energy outlook

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M e d ia R elease

4 February 1998


GPO Box 1563, Canberra ACT 2601 Telephone (02) 6272 2000 Facsimile (02) 6272 2001

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C urrency crisis affects Asian energy outlook

‘The outlook for Korea’s energy demand will be seriously affected by the current economic and financial situation in Asia’, Dr Jeong Shik Shin, President of the Korean Energy Economics Institute said today at OUTLOOK 98 in Canberra. ^

Dr Shin said the growth in Korea’s energy demand will slow because of structural changes caused by the financial crisis, including slower economic growth and increases in energy prices.

‘The financial crisis could, however, provide an important opportunity for Korea to accelerate liberalisation of its energy economy’, Dr Shin said. ‘Among other things, this should result in a shift away from government intervention in energy markets to a more market driven system.’

Dr Charles J. Johnson, Head of the East-West Center’s Coal and Environment Project, highlighted the potential importance of future emission abatement policies in developing Asian economies. Dr Johnson projected that such policies would have considerable negative impacts on coal powered electricity generation in the region.

Dr Roger Stuart, Manager of ABARE’s Environment and Trade Branch, said that while various factors would affect Asian energy markets, energy demand is expected to grow strongly over the longer term.

Using ABARE’s general equilibrium model of the world economy, MEGABARE, Dr Stuart outlined the significant gains likely to occur in the Asia Pacific region from APEC trade liberalisation initiatives and the positive effects on the region’s energy markets.

‘Understanding these dynamics will be an important consideration for businesses operating in the region’, Dr Stuart said.

Mr Don Carroll, Group General Manager, Business Development, BHP Power, called for a reduction in energy market regulation.