Observers in Hong kong believed that Sept. 11 has had surprisingly little effect on Asia, apart from Pakistan. Indeed, they said, Asia in many ways has experienced less change than the United States and Europe.

For the most heavily-hit airline industry, it was true that passengers simply stopped flying in the United States for a while after the terrorist attacks, but it presented less of a problem for Asian airlines, which were able to cut back to levels last seen during the financial crisis, according to the Asian Wall Street Journal.

It was a relatively simple matter to drop flights while people were staying away in most of the Asian countries. However, airlines in the United States were not able to adapt so quickly, in part because they have more unionized workers who are not so easy to fire, the newspaper commented.

It was estimated that increased security measures at the US airports would cost Delta Airlines 650 million US dollars for 2002.As matter of fact, the US airlines reported a loss of 588 million US dollars for the first half of this year.

By contrast, the Hong Kong-based Cathay Pacific Airways posted a seven percent rise in first half earnings, while the Australian Qantas posted a three percent gain compared with the year-earlier period.

Analysts on global economy here felt that in Asia, a decline inbusiness to and from the United States was offset by the growth oftraffic within the region, especially in China. Tourists from places such as Japan, who cut back on travel to the United States,have been flying within Asia instead, helping to keep demand up inthe region.

The latest figures for some 280 airlines around the world showed that a global decline of 7.9 percent in passenger traffic in July this year from the year-earlier month, but for Asian airlines, passenger traffic actually increased by 2.6 percent in July from the previous year.

In sectors such as stock and bond markets and insurance industry, analysts said that a year after Sept. 11, 2001, Asia markets are looking a lot less risky than their US and European counterparts. The most palpable effects on Asia during the past year have been the increased investor interest in the region and rehabilitation of Asia's image from a treacherous gambling den to a haven.

Analysts from Merrill Lynch in Hong Kong said that Asia has proven itself, especially over the past two years, when there has been a lot of trauma internationally. As the current challenges around the world continue to play out, a lot of interest has been seen from international investors due to Asia's defensiveness.

However, the US and European stock markets have been hit by accounting and corporate-governance scandals involving Enron Corp.and WorldCom Inc. and a barrage of bankruptcy filings, which have done as much to shake markets worldwide as the attacks on New Yorkand Washington did, fund managers and analysts said.

Positive credit trends, such as recent upgrades from ratings agencies Moody's Investors Service Inc., Standard & Poor's and Fitch Inc. for sovereign and corporate credits in Malaysia, South Korea, Thailand and Hong Kong, also have given a lift to Asian equity investors.

(Xinhua News Agency September 12, 2002)