Developing economies should strengthen domestic demand to sustain Asia's strong economic growth and help rebalance the world economy, the head of the Asian Development Bank (ADB) said Thursday. Haruhiko Kuroda told a Seoul forum that the 2008-9 global crisis had highlighted the risk of unbalanced growth.
"Developing Asia needs to strengthen its domestic and regional demand it must show that it can also consume and invest wisely," he said. Asian economies led the world out of recession when traditional markets faltered, Kuroda said, with the region attaining an estimated 8.6 percent economic growth in 2010. The figure was expected to fall to around seven percent this year as trade slows, Yonhap news agency quoted him as saying.
To achieve long-term sustainable growth, Asia must generate more domestic demand without undermining trade, Kuroda said. He called for a diversification of export destinations within Asia as well as to other emerging regions such as Latin America and Africa. Kuroda also stressed the need to invest in infrastructure. "According to ADB estimates, $8 trillion is needed through 2020 just to keep infrastructure in line with growth projections in Asia," he said.
The ADB president called for a higher level of regional integration in Asia. A single Asian currency would come into being in the long run, he said. But this was likely to take a few decades since it would involve political decisions and the establishment of a single regional market.
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