Washington: Asian countries, whose resilient economies have given them new clout as the world tackles a financial crisis, need to do more to shore up the global trade and banking system, the chief economist of the Asian Development Bank said on Thursday.
“Now the role of Asia in the global forum increased significantly and is recognized by global leaders,” said Jong-Wha Lee of the Manila-based ADB.
“The power balance has been changing from the West to East Asia -- perhaps this is the first step,” he said in an interview with Reuters in Washington.
Lee, a South Korean academic, was referring to the new prominence of his country and fellow Asian economic heavyweights China, India and Indonesia in the G20, formed last year amid the global financial crisis.
“We see this as a way to promote the peaceful rise of Asia as a new economic power and to integrate East Asian countries together and to let Asian countries contribute to the world economy,” he said.
The ADB, which wants to achieve “open regionalism” in Asia by reducing trade barriers and boosting interregional trade in finished goods, sees bolstering trade openness in these uncertain times as a key contribution Asia can make, Lee said.
“Asian countries got a lot of benefit from international integration. Now is the time to preserve the international trade openness as well as financial globalization,” he said.
“We need to contribute more,” added Lee.
More stable growth in Asia coming out of the global crisis will require China and other economies to shift from export-led growth to domestic demand, both to cushion it from external shocks and reduce the huge current account surpluses that contributed to the global financial meltdown, he said.
“Asian countries also contributed to global imbalances and so we need to try to readjust our export-oriented strategy,” Lee said, underscoring one of the main messages from last month’s G20 summit in Pittsburgh.
“Further exchange-rate flexibility is very important. because artificial intervention to keep currencies competitive, undervalued, is what we want to avoid,” he said.