ADB Delegates Optimistic Over Asia's Future

SHANGHAI, PEOPLE'S REPUBLIC OF CHINA (11 May 2002) - Delegates attending the 35th Annual Meeting of the Asian Development Bank (ADB) expressed optimism over Asia's future - if economic and governance reforms are pursued.

In a seminar on "Asia 2015: Thinking Through Mega Trends," the finance ministers of India and Pakistan agreed that Asian countries need to improve governance to emerge from their current political and economic problems.

Shaukat Aziz, Pakistan's Minister for Finance and Economic Affairs, underscored the importance of good governance, saying that "none other than poor governance is responsible for South Asia's relative backwardness." South Asia is home to the largest number of the world's poor.

Mr. Aziz, who is Pakistan's Governor to ADB, said the 21st century will be the "Asian century" if Asia adds value to its activities, particularly in science and technology, accelerates deregulation, and broadens financial reform.

Yashwant Sinha, India's Minister of Finance and ADB Governor for India, said governance should be improved and democratic institutions strengthened. Mr. Sinha, also noted the importance of trade in Asia's development.

He foresaw an "intense revolution of rising expectations" from Asians who "will refuse to live in poverty and deprivation and will demand peace, development, and a better quality of life." He expressed optimism that Asia will rise above its present conflicts by 2015 and will be a "more peaceful place."

The People's Republic of China (PRC) will be "an engine of growth" in Asia rather than an economic threat to its neighbors if it completes its transition to a market economy, said Professor Justin Y. Lin, Director and Professor of the Peking University's China Center for Economic Research. He said technological innovation is the PRC's most important determinant of economic growth.

However, the PRC is still a poor country, said Mr. Lin, noting that its major development indicators are comparable to Japan's indicators in the 1960s. For instance, the PRC's per capita electricity consumption was 1,071 kwh in 2000 while Japan's was 1,236 kwh in 1960.

Robert D. Hormats, Vice Chairman of Goldman Sachs (International), said the emerging issues in Asia are the growth of its aging population, banking and financial reforms, income inequality, and the war against terrorism. Of these, the reduction of income inequality is the most important challenge, Mr. Hormats said.

Marcia Samson
Tel.: 5088-6241
E-mail: msamson@adb.org