The UNCTAD study compares the liberalisation experience in India and Korea. Delivering the fifth LK Jha memorial address at the Reserve Bank of India on Friday, Ricupero said that the problem with Korea was not that its companies were overleveraged, but that the country's financial systems were not prepared to weather a financial crisis. "It was a question of premature liberalisation that was the undoing of Korea. Indian economy was spared the repurcussions of the crisis because of its guarded and cautious approach to liberalisation," he said.

In this context, Ricupero said the slow pace of India's leberalisation shouldnot be seen as out of step with liberalisation. He cited the example of many European countries like Italy which was slow in liberalisations, till strong financial systems were in place.

Ricupero said that the south-east Asian crisis in not yet over. "Where it will end is hard to tell, as much will depend on how the Russian and Japanese economies are handled over the coming weeks and months. What is clear, though, is that the final chapter of this saga has not yet been written."

As signs for the deepening and spreading nature of the crisis, he pointed out that: "Economic growth and exports are slowing down in China, alongside a decline in prices for the seventh consecutive month; In HongKong, the first quarter of 1998 recorded a two per cent drop in GDP." "As a result of recession and the continuous depreciation of the Yen in Japan, Pakistan has devalued for the second time in nine months. The Australian dollar has fallen and Australian commodity exports will probably fall for the first time in 20 years,leading to a current account defecit expected to exceed 6.5 per cent of GDP.

The New Zealand government has warned that the economy is `halfway down the road to recession' as GDP declined by 0.9 per cent in the first quarter of 1998. In the same period, Taiwan recorded its first quarterly trade defecit in 17 years." Ricupero, the former finance minister of Brazil, said the after effect of the crisis will be long lasting.

"As a Latin American who lived through the debt crisis of the 1980s, I can tell you that the destructive effect of these disasters can prove extremely damaging and can take long to reverse," he said.