Japan’s Yosano Says Asia Is Key to World’s Recovery From Crisis
By Jason Clenfield
May 4 (Bloomberg) -- Japanese Finance Minister Kaoru Yosano expects the global economy to recover from the financial crisis in “the not too distant future,” with Asia being the key to the revival.
To help accelerate recovery in Asia, Japan yesterday offered $60 billion of yen-denominated swap facilities. Asia’s biggest economy also pledged to contribute $38.4 billion to a $120 billion foreign-exchange reserve pool shared by 13 nations.
“The resurgence of Asia will undoubtedly be the key for the recovery,” Yosano said in a speech to governors of the Asian Development Bank today in Bali, Indonesia.
The ADB forecasts economic growth in the region will accelerate to 6 percent next year from 3.4 percent in 2009 amid signs that the recession may be easing. China’s 4 trillion yuan ($585 billion) stimulus package is taking hold, helping spur domestic consumption and supporting the region’s exports. Overseas shipments from Taiwan, Singapore, South Korea, Indonesia and Japan all rose in March on a month-to-month basis.
Still, Asia should do more to shift its economies away from exports and toward domestic demand, Yosano said.
Global trade may contract for the first time since World War II this year, the World Trade Organization predicts, as U.S. and European demand slumps. Asia’s expansion in the next two years will be “well below” recent growth rates, the ADB said.
‘Enhance Consumption’
“The ADB should assist the regional member countries in rebalancing their economic structures,” he said. “For some countries it will be assisting the strengthening of social safety nets to enhance consumption,” an idea that China embraced last month when it said it would spend 850 billion yuan to overhaul the nation’s healthcare.
ADB governors last week approved a tripling of the lender’s capital to $165 billion. That will help the Manila-based lender in its efforts to reduce poverty in a region where more than half the population lives on less than $2 a day.
Japan will provide $100 million in the next three years to help provide technical assistance and implement small-scale projects to alleviate poverty, Yosano said.
“As the adverse effects of the crisis are expected to spill over into the real economy and their reach to the Asian region, it will be the socially vulnerable poor who will be hit hardest,” he said.
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