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Jul. 12 – Asia must increase its domestic investment and consumption as a long-term policy issue said International Monetary Fund managing director in a speech Monday in Daejeon, South Korea.
“Asia has emerged as a global economic powerhouse… no one can doubt that Asia’s economic performance will continue to grow in importance,” Dominique Strauss-Kahn said during the opening of the conference, “Asia 21: Leading the Way Forward.” He refers to domestic investment and consumption as Asia’s second engine of growth that will include stronger social safety nets, better infrastructure and more flexible exchange rates.
“As Asia’s economic weight in the world continues to rise, its stake in the economic performance of other countries is rising too,” he says.
He says that Asian policymakers should prepare for possible shocks coming from the global economy such as the eurozone turmoil. He cites capital inflows, and risks related to overheating and credit and asset bubbles as policy challenges for the region.
Strauss-Kahn also attributed the region’s economic rebound on macroeconomic, financial and corporate sector reforms implemented in the last decade.”So, despite being hit hard initially, Asia was able to bounce back quickly from the global financial crisis,” he said.
The two-day conference will study the region’s dynamism and leadership role in the world economy in the 21st century.
As a reflection of the Asia’s growing importance, the IMF has plans to move 5 percent of its quota from developed countries to emerging countries.
