AS most of Europe moves towards monetary union and the United States continues to enjoy one of its longest periods of economic growth, the countries of South-east Asia are locked in financial and economic crisis. What was so recently a region of great hope and opportunity is now in turmoil, dependent on loans from the International Monetary Fund for survival. Even Hong Kong, the jewel in the crown, is in some danger of moving into recession. At the opposite extreme is Indo-nesia where the dramatic events leading up to the resignation of President Suharto have demonstrated how fragile civilisation is when an economy is on the verge of collapse. The fall-out from Indonesia has dampened hopes of an early recovery in the region and raised doubts about countries outside it. Chief among these is Russia where President Yeltsin and his youthful Prime Minister, Sergei Kiriyenko, have been defending

the parity of the rouble by raising short-term interest rates from 50% to 150%.

In the early nineties Russia was plagued by currency instability and hyper-inflation. Yeltsin has so far been unsuccessful in rejuvenating the Russian economy, where industrial output has fallen by 50% since the demise of communism, but he has brought stability to the rouble at home and abroad. The President has gambled all on the reforming zeal of Kiriyenko, whom he plucked from obscurity in the face of opposition from the political classes. It is vital that he wins this

battle if Russia is to make economic headway.

He has the support of the IMF and the early indications are that the measures the Government has taken have begun to restore confidence in financial markets. But, as with the tiger economies of the Far East, the best that can be hoped for is a long, slow recovery. The strength of the dollar, especially against the yen, has not helped, and it is not yet clear if the worst is over.