Corporate lessons would include a focus around business with a distinctive advantage and earn the right to grow in these businesses. Creations of a mix of near and longer term growth options would be a corporate lesson for the country, MacMurray said.

Public policy lessons would help ensure economic opening and reform aligned with regulatory and institutional capability. "Financial, corporate and state-sector capabilities typically need better management," he added.

India's lesson from the Asian perspective could focus on four key areas including Asia's economic discontinuity, policy responses, local corporate challenges and opportunities and multinational challenges as well, he said.

The structural weaknesses in the Asian economies includedinsulation from market forces, underdeveloped financial infrastucture, corporate shortcoming. According to MacMurray, the attractive fundamentals of growth era include high savings, favourable demographics in the form of a low dependency and labour input, emphasis on education, modest inflation, fiscal surplus and a stable government.

The prescription of restructuring, according to the economist, included a four stage model encompassing the stages of liquidity squeeze, financial crunch, restructuring and restabilisation.

The liquidity squeeze, which was for 4 to 6 months, included cash shortage, initial bankruptcies and a crisis of confidence. The next stage -- financial crunch -- lasts for six to eight months and the signs are recession, closing of some financial institutions and continuing liquidity problems.

The third stage is of restructuring, lasting for two to five years, and is highlighted by business consolidation, deregulation, active mergers and acquisitions and more foreign investment.

Thelast stage, which has a long term effect for 5 to 15 years, is the period when GDP growth resumes, world class manufacturing takes place, service sector growth is witnessed and a medium and small business expansion takes place.

McKinsey sees potential Chinese devaluation

Calcutta: McKinsey and company warned of a potential devaluation of the Chinese yuan due to depressed intra-regional trade. Mcmurray said the Asian crisis which had affected a number of countries already, posed a threat to others also.

He said, in addition to possible Chinese devaluation, there was a chance of further Japanese recession and this could exacerbate the condition in the region.

Stating that the Asian downturn was severe, he cited figures to show that average change in real GDP during the period between mid-1997 to mid-1998 for the economies of Singapore, the Philippines, Malaysia, Thailand and Indonesia was minus 43 per cent, the highest, being that of Indonesia minus 77 per cent. In terms of dollar valuation ofassets, He said the dollar value of stock market indices of these countries fell by as high as 88 per cent.