South Korean officials said Sunday they have been strengthening their monitoring of changes in emerging markets amid growing political and financial unrest that may affect the global economy.
"We are closely watching the situation (in emerging markets) with vigilance," an official at the finance ministry said, demanding anonymity. "Concerns over emerging economies are spreading as financial instability in Argentina and Turkey, and political unrest in Ukraine, Thailand and Venezuela have been growing in recent months."
The Korea Center for International Finance, which follows global financial situations, said in its recent report that political instability in the countries may hurt the world's economy more seriously than expected.
Ukraine is an energy supply path that transfers most of its natural gas and crude oil extracted in Russia to Europe. Venezuela, the world's ninth-biggest oil producer, is a high-powered country in the global energy market and has the world's biggest oil reserves worth $297 billion. Thailand is the second largest economy among the 10 Southeast Asian economies.
The developments in these countries may not yet have caught the attention of the world economy, but they can have unforeseen influences, the KCIF said, noting that earlier global crises, including the 1997 Asian financial turmoil, were limited in their impact to the affected country or region and did not cause immediate alarms to sound.
"The recent uneasy developments in emerging markets can be interpreted as an expected fallout from the U.S. Fed's measures to scale back its stimulus," the ministry official said. "We will prepare for any unstable situation for exports."
The Fed started a gradual exit from quantitative easing in December and has since reduced bond purchases by $20 billion in the following two months.
Finance Minister Hyun Oh-seok last week held a meeting with economy-related ministers and discussed countermeasures for situations in emerging markets. Officials said the participants were briefed on the latest developments in those markets and agreed to consider export-support measures if needed. (Yonhap)