Climate change is likely to cause huge economic, social, and environmental damage to South Asia, a region already hard-pressed to lift a third of its 1.5 billion population out of poverty.

Regional cooperation and integration broadly continues to rise. While Asia’s intraregional trade share increased between 1990 and 2012, it ticked down in 2013 due to slower trade within East Asia and within South Asia. However, this is balanced by an ongoing increase in foreign direct investment and equity and debt holdings.

Developing Asia is expected to continue along its path of steady growth in 2014 and 2015. Moderating growth in the People’s Republic of China as its economy adjusts to more balanced growth will offset to some extent the stronger demand expected from the industrial countries as their economies recover.

In 2013, the region sold a record $141.5 billion of bonds denominated in US dollars, yen, and euros, of which $128.4 billion were issued by the region’s companies. Depreciation in home currencies would mean higher debt servicing costs at a time when the domestic economy is also likely to be weaker.

An ADB study details the potential costs of climate change in the Pacific – including modeling of future climate over the region, assessments of impacts on natural resources, tourism, and human health, and economic repercussions under various emission scenarios.

Emerging East Asia's local currency bond markets continue to expand but the region remains vulnerable to shifts in global investor sentiment amid expectation of tighter US monetary policy moving forward.

Trade within countries in Asia's subregions varies enormously and has fallen in recent years while trade between subregions is broadly higher and has grown, according to ADB's latest Asian Economic Integration Monitor.

With rising sea levels, severe storms, and more intense drought caused by climate change, the cities of East Asia's powerhouse economies are at high risk. Climate change will cause massive swaths of land to disappear, force millions to migrate, and wreak havoc to infrastructure and agriculture.

The Asia and Pacific region must make headway toward catching up with the advanced economies and matching their quality of governance. Focusing on strengthening public service delivery can provide immediate benefits to make growth more inclusive and create momentum for wider governance reforms.

Developing Asia is challenged to sustain its growth momentum - its pace is expected to fall back marginally in 2013 before picking up in 2014. Faced with the twin challenge of maintaining financial stability and sustaining growth, the recent financial turmoil has all the more emphasized the need for structural reforms to support growth in the region.