SYDNEY -- A high rate of saving among Asians was once credited for its important contribution to the remarkable performance of their "miracle" economies. It has become clear that neither aggressive investment spending nor high saving rates can guarantee sustainable growth. Now, high savings should be interpreted as a symptom of despair of East Asia's economies in crisis. A considerable part of the investments over the past decade has evaporated in a property bubble or disintegrated into excess capacity of production facilities.

And now with the region's economies struggling to recover from slowdowns or full-blown recessions, uncertainty about the future is inspiring Asians to save even more money. Obviously, the increase in savings means there is less buying. In turn, companies find themselves holding growing inventories and lower profits as they resort to price-cutting necessary to shed unwanted stockpiles. At the same time, there will be reductions in employment that induce households to begin another cycle of saving more saving and spending less.

In South Korea, where unemployment moved toward an all-time high of 2 million, or just over 9 percent, and the economy is suffering from stagnating growth, gross national savings rose to over 35 percent of GDP in 1998 from about 33 percent in 1997. Over the same period, Malaysia's savings rate also climbed about 2 percentage points to just over 41 percent, while in Thailand savings went up 1 percentage point to 34 percent.