Asian Development Bank President Haruhiko Kuroda warned Thursday that protectionist measures will damage other economies and called on Asia to work more on coordinating macroeconomic policies to better deal with the global recession.
Projecting that the aggregate growth of developing economies in Asia in 2009 will be revised to just over 5 percent instead of 5.8 percent, Kuroda said Asian economies "must avoid 'beggar-my-neighbor' conditions" in which they try to benefit at the expense of others.
"Amid dwindling overseas demand, especially falls in U.S. consumption, each country might be tempted to adopt self-centered policies to maintain growth," Kuroda said, referring to currency devaluation, import tariffs and other steps used to protect domestic industries.
These policies could exacerbate the global economic downturn, he warned.
"It is impossible for all the countries to sustain growth by expanding their exports. We need policy coordination to transform the economic structure that is heavily dependent on demand in U.S. and European markets," Kuroda said.
Asia's export-led economies have been hit hard by plummeting demand for their wares amid the global economic crisis. The Manila-based development bank chief said most Asian economies have seen a double-digit, year-on-year declines in exports, with Taiwan hit worst by a plunge of 40 percent.
Despite the dive in the value of South Korea's won and speculation that China might devalue the yuan, Kuroda said he does not see protectionism spreading through the region at present.
However, he called for keeping close tabs on protectionist moves among each other anyway.
The ADB chief also expressed hope that major shareholders will agree to boost the bank's capital threefold by its annual meeting in May in Bali, Indonesia, so it can expand lending to member countries affected by the economic crisis.