Challenges on Asia's Horizon

At the Challenges for the Asian Economy in 2008 and Beyond symposium at ADBI on 8 February 2008, ADB President Haruhiko Kuroda discussed several challenges on Asia's horizon. He began with an overview on Asia's strengths and vulnerabilities in light of current global economic realities. Asia's record on economic growth and poverty reduction has been “stunning,” Mr. Kuroda said, citing developing Asia's rising incomes and life expectancies and the shrinking proportion of people living in absolute poverty.

Although Asia has become a major contributor to global growth, Mr. Kuroda noted, the region's economies “are not totally immune to global market turbulence and negative developments.” Asia's policymakers need to take steps to ensure confidence in the region's financial markets, he observed. While significant progress has been made since the 1997–1998 financial crisis, reforms have yet to be deepened in areas including exchange rate flexibility, effective public debt management, and continued structural reforms.

Mr. Kuroda next touched on the need for, and progress toward, regional cooperation and integration in Asia and the Pacific. ADB's experience has shown that a pragmatic, step-bystep, bottom-up approach to regionalism is appropriate. Given the diversity and size of the region, he said, it is logical to begin cooperation at the subregional level, building outward to eventually achieve wider regional integration. ADB aims to support this regional trend toward deeper integration.

Moving on to the challenge of climate change, Mr. Kuroda warned that the Asia-Pacific region will increasingly contribute to its causes unless economic, social, and environmental patterns change. It will also disproportionately suffer the consequences of climate change. Emphasizing the need to expand the use of renewable energy sources and to make the region's economies as energy-efficient as possible, Mr. Kuroda noted the “key role” of multilateral development banks like ADB in finding ways to combat climate change. ADB's new long-term strategy to support the region's development, he said, is under discussion “with a particular focus on such key areas as inclusive growth, environmental sustainability, and regional cooperation and integration.”

Read Mr. Kuroda's speech.