'Resilient' Asia Should Weather Economic Crisis

Asian Development Bank President Haruhiko Kuroda at the Asia Society.

NEW YORK - The President of the Asian Development Bank described Asia as well positioned to weather the current world economic downturn and said the region should "avoid a full-fledged financial crisis."

Speaking at Asia Society Headquarters in New York, Haruhiko Kuroda, a former Special Advisor to Japanese Prime Minister Junichiro Koizumi, discussed the impact of the global financial crisis on Asia and recommended strategies that may help Asian countries weather these challenging times.

Kuroda acknowledged the recent significant slowdown in Asia's economic growth and predicted further deterioration. However, he emphasized that Asia today is more resilient to external shocks than it was a decade ago—and cited three reasons in support of his argument.

First, he said, Asia today has better "external positions" and large international reserves. Second, the region’s financial institutions have little direct exposure to US prime mortgages and structured credit products, the root causes of the current turmoil. Third, more prudent economic policies implemented in most Asian countries since the 1997 crisis should help mitigate the impact of external shocks.

Kuroda concluded his remarks by encouraging national and regional collaboration in Asia and stressing the importance of multilateral banks to the region. As Asia’s economy becomes more integrated, he predicted, trade, direct investment, and social exchange will only increase, which in turn will be crucial for ensuring Asia's continued growth during a difficult period.

Reported by Yoshie Ito, Asia Society

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