Asian economies to lead world growth: WB
Asian economies to lead world growth: WB
BOMBAY (Reuter): Asian economies will lead global growth in the next century with those in East Asia continuing to fuel the rise, the World Bank's managing director said yesterday.
"Asian economies will no longer be impacted by the world economy but will impact the global economy," Gautam Kaji, World Bank managing director told Reuters in an interview.
"Asian economies will contribute something like 50 percent of the growth of global GDP in the next century," said Kaji who is visiting India at the invitation of the finance minister Manmohan Singh.
Singh is the architect of India's market-oriented economic reforms which have dismantled decades of socialist policies.
Kaji had been scheduled to address bankers in India's commercial capital later yesterday but the speech was canceled because of seven days of state mourning following Monday's death of former prime minister Morarji Desai.
Kaji said East Asian economies would be the major contributors to the growth and may alone contribute 40 percent of the increase in GDP.
"I expect East Asia to continue to grow at fairly high levels," Kaji said. He said east Asia was currently growing at an average 7-8 percent per annum.
"But a number of fast-growing economies in east Asia have a much higher growth rate, including into the double digits," he said.
The World Bank official said India needed to accelerate its reform program through the active participation of all its states in the reform process.
"In China one sees provinces pushing against limits which Beijing sets," Kaji said commending China's success in implementing its reforms.
Reform
Bankers and analysts say the Indian reform program, which was launched in mid-1991, is limited mainly to major cities.
They say despite the lifting of controls and liberalization lower level bureaucrats still retain control in several areas.
"If one can maintain this momentum of reform and translate what we're seeing today to a more far reaching program, where benefits start permeating more broadly, India could become a very powerful economic force globally," Kaji said.
He said East Asian economies maintained strict macro economic fundamentals, invested in human resources and agriculture and were not afraid to withdraw if decisions went wrong.
"The success of East Asia is that they maintained macro economic fundamentals strictly and boldly through good times and bad. They never wavered," he said.
He said their outlook had an outward orientation which forced local companies to be globally competitive.
Kaji said India needed to reform its agriculture sector and invest more in health and education for a stronger growth.