Asia is a linchpin for global economic stability, and the region has emerged from the global crisis with its economic standing enhanced, said Christine Lagarde, Managing Director of the International Monetary Fund (IMF).
Asia’s economies have been extremely resilient in the face of the global financial crisis, and the region has enjoyed some of the highest growth rates in the world, contributing more than half of world growth since 2008, Lagarde told top officials in Thailand during her recent trip to the country.
Lagarde said the difficult reforms undertaken by many economies in Asia after the devastating financial crisis in the region in the late 1990s helped position Asia as “a major engine for global growth.”
“Asia does not stand still—it is constantly reshaping itself and each time I am here, I see a new, improved, upgraded version,” she said.
The IMF chief said Asia’s stronger bank balance sheets and fiscal positions have allowed the region to avoid the downward spiral of debt and weak banks that is threatening Europe.
But she warned that the repercussions of the European debt crisis remain a threat. The main near-term challenge for policymakers across Asia is to decide how far to loosen policies in support of growth, she said. At the same time, they need to continue encouraging domestic investment and consumption to promote growth.
“So the message is clear: Asia has a growing stake in the global economy—and the global economy has a growing stake in Asia,” she said.
Lagarde said the recent global crisis has underlined the importance of global cooperation. She pointed to the Association of Southeast Asian Nations, the revamped multilateral currency swap arrangement known as the “Chang Mai Initiative,” and other cooperative mechanisms, as models of successful regional, political, and economic cooperation.
Photo: tommykwok630
