UN economist for Asia urges region to generate own growth engines

Oct 8, 2009, 7:52 GMT

   Singapore - Asian nations should generate their own growth engines and seek more independence from the US economy to better protect the region's economic dynamism against global financial downturns, a leading Asian economist from the United Nations said Thursday.

   After the worldwide recession, the Unites States was unlikely to resume its role as the engine driving Asia's growth like in the past, Nagesh Kumar, chief economist of the UN Economic and Social Commission for Asia and the Pacific, told a seminar in Singapore.

   'Even with a recovery of the US economy it will be not the same thing for the Asian economies,' he said. 'Asia will have to generate its own engines of growth.'

   Currently, there were green shoots in the world economy, Kumar said, 'but it is a very fragile recovery and all driven by fiscal stimulus packages.'

   One future growth track would be to generate domestic demand by reducing poverty in Asia, he said, noting that the region was home to more than half of the world's poor.

   'If these poor people can be brought into the mainstream ... then you have the prospect of millions and millions of new consumers augmenting domestic demand,' he said.

   A second growth track would be to fully exploit the potential of regional economic cooperation in Asia, he added.

   'What we need is a broader and more inclusive institutional architecture for promoting monetary and financial cooperation in Asia-Pacific,' he said.

   Financial institutions like the Asian Clearing Union or the Asian Bond Fund were limited in their function and on too small a scale to be visible and effective, Kumar said.