Asian economies need to be carefully steered

Hanoi: India on Wednesday cautioned that Asian economies which are the lynchpin of global recovery would need to be carefully steered.

Asian economies are not on the "autopilot", Finance Minister Pranab Mukherjee said at a Governors` Seminar on `ASIA 2050` at the annual meeting of the ADB here.

Agreeing with the ADB`s report `Asia 2050 – Realising the Asian Century`, he said "…despite its blistering pace of growth, Asia is not on the autopilot mode and in fact would require careful steering to realise the goal of a prosperous Asia which will not only make lives of Asians better but augur well for world economic growth".

Emphasising on "regional cooperation and integration through transport and energy connectivity", Mukherjee said it could pave the way for the emergence of a vibrant regional market.

"Strengthening cross border infrastructure linkages in transport, communications and energy sectors would help in addressing bottlenecks that are impeding growth," he said.

The Indian Finance Minister said if Asia has to reach the level of an affluent region, achieving broad-based, inclusive and sustained growth would be a paramount necessary.

About one billion people, the majority of them Asians, live below the poverty line and face chronic undernourishment.

Mukherjee also said Asian countries should aim to transform their economies into knowledge-and skill-based economies over the next 40 years to ensure high sustained growth.

He, however said that the countries within Asia should strive for better governance and transparency in policy making.

"For the growth story of Asia to unfold, an enabling environment and appropriate institutional structure is a pre-requisite…When we talk about governance, it is not just corruption but also accountability and predictability.

"All countries need to work towards improving governance, transforming their institutions into high quality, modern institutions and apply transparency and accountability filters to domestic policy making and implementation," he said.

The ADB study has predicted that Asia`s gross domestic product (GDP) would soar to USD 148 trillion and account for 51 per cent of global output in 2050.

It said that an additional 3 billion Asians could enjoy higher living standards, but only if Asia sustains its present growth momentum and addresses daunting multigenerational challenges and risks.