The Hindu Business Line : Policy of inclusive growth essential for Asia: Reddy

Mumbai, Dec. 4 Asian countries must adopt a policy of inclusive growth as two-thirds of the world’s desperately poor people live in Asia, said the Reserve Bank of India Governor, Dr Y. V. Reddy. Dr Reddy was speaking on “The Rise of Asia – Implications for the global economy,” at the 40th Anniversary Celebrations of the Bank of Mauritius, at Mauritius on Monday.

Citing some challenges faced by Asian countries, Dr Reddy said that consequences of growing regional inequalities were being felt in several Asian economies as the share of billionaires and high net worth individuals was growing disproportionately.

There would also be large demands on urban infrastructure, as the urban population in Asia may double by the year 2030 relative to the year 2000.

More resilient

About the resilience of Asian economies, Dr Reddy said the financial systems in most Asian countries were far more efficient and resilient than before. The external sector has been strengthened and considerable reserves provide cushions to withstand financial contagion.

“Asia’s reserves can help smoothen the process of unwinding of global imbalances that appears to be underway through, what has been described as “falling with a parachute" scenario.

While any slowdown in the US will impact Asia adversely, since Asia’s exports to the US are large, some “de-coupling” has occurred in view of the growing intra-Asia regional trade.