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Asian economies should collectively think on channels of engagement with each other that create synergies directed at addressing common challenges.
Mr Pranab Mukherjee, Union Finance Minister, expressed this view while inaugurating a seminar on ‘21st Century as the Asian Century: Role of India and China', organized by the Manipal Centre for Asian Studies of Manipal University here on Saturday.
“We must appreciate that to gain in unison, we need to act in unison. Even in existing multilateral fora, including G-20 and IMF, we should aim to coordinate more in areas where there is significant collective gain to be achieved.”
He said that economic challenges faced by each Asian country are unique and there is no ‘one-size-fits-all' future trajectory of economic development. There is worldwide recognition of the fact that most Asian economies, including India, are poised to attain sustained long-term growth, notwithstanding some short-term policy challenges.
Co-exist
While advanced Asia must maintain its economic ‘miracle', an environment must be created for the rest to catch-up and prosper. Ultimately it would depend on how individual Asian economies manage their ‘rise' strategically in order to co-exist and co-prosper, he said.
With heightened uncertainty in the Euro zone, the short term concern at present is regarding reversal in FII flows leading to increased currency volatility in several Asian economies.
“We in India are witnessing unprecedented depreciation of the rupee vis-à-vis the US dollar with the current account deficit widening to around 4 per cent of GDP,” he said.
Even in such a scenario, which is being addressed via a slew of policy measure, the IMF expects growth in Asia and the Pacific region to gain momentum in 2012, he said.
With a reasonably quick recovery, emerging economies in Asia are generally better placed vis-à-vis other emerging economies to withstand the fresh round of global economic turmoil.
In the long term, a key advantage that Asian economies, prominently India and China, possess is high rates of saving and investment. Large size of the domestic market coupled with mechanisms to harness potential demographic dividends can lend robustness to the Asian growth story.
Stating that Asian economies face several challenges, he said a major one is to devise ways in which the fruits of high growth can benefit the poorest of the poor. Poverty and inequality, with their associated ills continue to be single most common challenge, Mr Mukherjee said.
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