Rising Asian prosperity to be sustained by new growth driver

peopledaily.com.cn

Asia will be able to sustain its rising prosperity by relying on new growth drivers such as boosting local consumption and diversifying its export markets. According to the recent Asian Development Bank (ADB) report presented Thursday, this will keep Asian economies resilient amid sluggish growth in the United States and Europe. According to ADB's report entitled "How Can Asia Respond to Global Economic Crisis and Transformation," Asia can cope with renewed financial crisis and slow export demand from developed markets. But the report stressed that long-term prosperity in the region will rely on domestic and regional markets as well as expanding ties with Latin America and Africa. "This is the new normal," renowned economist Jeffrey Sachs told the Governors' Seminar at the 45th Annual ADB Meeting here. With both the U.S. and Europe expected to have "slow and erratic growth", Sachs said that emerging Asian economies can't sustain their growth by continuing to export to their traditional markets. Rather, Asia has to boost domestic consumption and promote regional trade. "There's an opportunity for Asia to find other export markets, other than the traditional ones and Africa, for example, an export market, because Africa is a continent of 1 billion people," Sachs said.ADB offered key medium to long term measures that will support Asia's move to expand beyond its traditional markets. These include rebalancing growth toward domestic sources- consumption and investment; strengthening finance, deepening markets and fostering financial inclusion; improving the business and investment climate; preparing people for future jobs, upgrading industry and environmentally sound urban planning; boosting intra- regional trade and expanding "South-South" links and deepening regional cooperation and integration. But more than looking for other export markets or strengthening regional trade, Asia's growth will be sustained by being more inclusive and equitable. "We have the tendency to leave the poor out of the equation," Sachs said. Indeed, according to the ADB report, growing inequality threatens both economic growth and political stability. Poverty remains a problem in a region which is home to some of the world’s fastest growing economies. "The ultimate challenge is to continue transforming economies in a way that promotes peoples’ welfare and reduces poverty," ADB President Haruhiko Kuroda said. The ADB said Asian governments must invest more in human development and social services to uplift the welfare of its people, allowing them to receive the gains from rapid growth. Sachs said more public and private investments in core infrastructure such as housing, roads, power, information technologies, climate resilience, pollution control will "ensure long-term quality of life in Asia."