Asia's major economies, already through the worst of the financial crisis, are well equipped to lead a global recovery if they can guard against the spillover of sovereign risk and uncertain growth in the developed world.Economic planners who gathered this week for the Asian Development Bank's (ADB) 43rd annual meeting said they were looking to future growth after a year spent battling the effects of the crisis, but both China and Japan struck a cautious tone."Asia is likely to continue to lead the global economy for the foreseeable future, but the uncertain growth outlook for industrialised nations poses a risk for the region," IMF Deputy Managing Director Naoyuki Shinohara told Reuters."Due to the gap in growth rates between Asia and industrialised nations, capital inflows into emerging Asian countries may accelerate further," he said. "If such flows become volatile, they may cause sharp currency moves and raise inflationary risks."The ADB meeting, held for the first time in ex-Soviet Central Asia, was overshadowed by China's decision to lift bank reserve ratios to cool off domestic credit growth, as well as the Greek fiscal crisis and Thailand's political standoff.China demonstrated its growing clout in the international economic community by attracting attention not only from reporters but from delegates on what the world's third-largest economy will do on its currency and interest rate policy."The world economy is recovering, but the foundation is not solid," Chinese Finance Minister Xie Xuren said. "Asian countries are still facing an arduous task to maintain economic growth and adjust their economic structure."ADB President Haruhiko Kuroda, addressing the event's closing news conference on Tuesday, urged Asian economies to look to the future. He echoed comments from other delegates that Asia was on the road to recovery, but struck a note of caution."This year, the crisis is behind us in most of Asia but still some economies in the region are struggling," he said. "Next year, I hope the crisis will be completely over and all economies will be on the right track."CORPORATE BOND INITIATIVEEast Asian economies, including Japan and China, during the meeting finalised an important part of their initiative aimed at funnelling the region's massive savings into corporate bonds issued in Asian local currencies.The ADB, whose members include some of the world's fastest-growing economies, also launched an ambitious $9 billion solar energy initiative to help cut carbon emissions while meeting growing Asian demand for electricity."Climate change is important and crucial not only for the environment, but for the sustainable growth of Asia and the world," Kuroda said. The bank earlier identified Central Asia as a suitable location for its solar energy projects.The ADB meeting afforded Uzbekistan, Central Asia's most populous nation, a rare opportunity to present its economy to several hundreds top economic planners and potential investors.Amid tight security, delegates walked to meetings past enormous fountains and posters depicting the turquoise domes of the ancient Silk Road cities of Samarkand and Bukhara."It was a good opportunity for participants to think about what we will do next, but generally the mood was relaxed and participation was lower than before," said one delegate.Officials from Japan, still struggling from the fallout of the global crisis, kept a low profile at the 67-member multinational lender's meeting in the Uzbek capital Tashkent."I am aware that there is greater attention on sovereign risks than before due to the situations of Greece and Europe," said Japanese Finance Minister Naoto Kan. "Japan needs to take a firm stance in its fiscal plan due out in June."South Korea took a more aggressive attitude in discussing global issues."Countries should both strengthen their domestic financial systems and enhance regional cooperation to establish a common crisis response system," South Korean Finance Minister Yoon Jeung-hyun told a session.The Manila-based ADB will hold its next annual meeting in Hanoi, Vietnam.(Additional reporting by Zhou Xin and Robin Paxton, writing by Yoo Choonsik and Robin Paxton; Editing by Ron Askew)News posted by www.newsinfoline.com
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