At a time when the developed countries are bearing the burnt of economic crisis and an increasing market uncertainty due to mounting debt and deficit, the Asian economies (save the very low income ones) are on a different track. They are helping in global growth recovery. Also, they have strong domestic demand and pretty resilient exports sector. If this trend continues, then Asia will be the largest economic region by 2030, according to Anoop Singh's piece in the latest Finance & Development magazine.
For this to happen, Singh argues, Asia needs to continue good policy reform and watch out for few issues thorny issues:
- Surge in capital flows need to be managed to prevent overheating and to decrease vulnerability
- Shocks in the developed countries might transmit to the Asian economies (exports decline and credit tightening)
- Needs to keep on building domestic demand to make it a main source of growth
- Strengthen social safety nets
- Development of national and regional infrastructure to reduce transportation costs and foster regional integration