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CANBERRA, Australia (April 28, 1998 - PACNEWS)---Asia's financial crisis is looming as a new threat to the already fragile economies of the Pacific Islands states, according to The Australian newspaper.

It says Fiji's tourism industry has collapsed, Papua New Guinea is facing drastically reduced timber orders, while logging in the Solomon Islands has largely closed down since the Asian crisis began.

The newspaper says these latest developments will prove a severe challenge to a region already coping with longer-term problems.

It quotes the Manila-based Asian Development Bank's (ADB's) latest Asian Development Outlook, which predicts a possible currency crisis in the Solomons and worsening health in Kiribati. It also describes the economic outlook for the Federated States of Micronesia as "grim."

The bank is scathing about the quality of government in PNG, and says Fiji is carrying the burden of the National Bank of Fiji's failure and the lack of progress in curbing government spending.

The ADB says privatization in the Cook Islands, which has been a key part of the country’s strategy to promote private sector activity, looks like it is stalling because of opposition to foreign ownership.

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