Developing Asia's performance in 2007 broke records in almost two decades. Aggregate gross domestic product grew at 8.7%, on supportive global economic conditions, a largely favorable policy environment, and productivity gains as the region continued its remarkable modernization and transformation.
Conditions in the global economy now look distinctly unsteady with the United States, Japan, and Europe set for a synchronized slowdown this year. Still, developing Asia will not be hostage to the global slowdown, even if it cannot remain immune to it, and its growth this year and next should be only a little below longer-run trends.
But with commodity prices soaring and despite government price restraints, inflation is accelerating and is likely to hit decade-long highs. Rising inflation expectations are a more immediate threat to developing Asia than the prospect of a moderate slowdown in growth.
This year's theme on workers in developing Asia spotlights three issues. Will the region reap the demographic advantages of its many young people about to enter the workforce? Can it resolve its silent crisis in terms of its skills shortages? Third, with migration burgeoning within the region, will policies move to keep up with the reality on the ground?