Rising Asian economies need long-term plans: ADB

by Mai Iida

Kyodo News

Developing Asian economies will continue to grow faster than developed countries in the coming years and should introduce measures to sustain long-term growth, such as expanding productive capacity, a senior Asian Development Bank official said.

“The region has managed to grow quite rapidly over the last decade and even through this crisis” from 2008, said Joseph Zveglich, assistant chief economist at the Manila-based international body. “This is part of reasons why . . . we have been calling for authorities in the region to refocus on long-term issues.

“It’s now time to go back to thinking about raising income in the long term,” to fight poverty in the region, he said, noting the need for improvement in key growth areas ranging from trade and human capital development to infrastructure investment and financial-sector development.

The ADB is stressing the need to improve human and physical capital through better education systems and infrastructure facilities, expanding interregional trade, and developing the financial sector through corrections in complex institutional and regulatory frameworks and government-directed lending, to help the region achieve long-term growth.

The body expects developing Asian economies — referring to the 45 member economies of the ADB, including China, India and South Korea — to expand 8.2 percent in 2010 and 7.3 percent in 2011, according to the ADB’s updated version of its Outlook 2010 report, released in September.

That compares with the projection also stated in the report that major industrial economies would grow 2.2 percent in 2010 and 2.0 percent in 2011.

On downside risks, Zveglich said, “One of the biggest risks is whether the industrial countries are able to pull themselves out of the current slowdown.

“The industrial countries are still the largest part of global demand so a sustained slump in the U.S., Europe and Japan would eventually take the steam out of developing Asia’s growth,” he said.