Asia's time has come for global economy: IMF head

I / Daejeon (south Korea) July 12, 2010, 13:59 IST

Asia has emerged as a global powerhouse in the process of recovering from the worldwide economic crisis and its economic performance is likely continue to grow, the head of the International Monetary Fund said today.

"Asia has emerged as a global economic powerhouse from the recent worldwide financial crisis," IMF Managing Director Dominique Strauss-Kahn told a conference that kicked off here.

"Asia's time has come...No one can doubt that Asia's economic performance will continue to grow in importance."

The conference under the theme of "Asia 21: Leading the Way Forward," will last until tomorrow. Participants, including regional policymakers and high-ranking IMF officials, are likely to discuss the future role of Asian countries and the reform issue for the Washington-based lending organization.

His emphasis on Asia's role in the international community comes after the IMF recently projected that the economy in the Asian region will grow 7.75 per cent this year, a much faster rate compared with the around 4.5 per cent predicted for the global economy.

Strauss-Kahn, however, noted that countries in the region should guard against future possible outside shocks at a time when downside risks linger, such as the recent fiscal debt problems in Europe.

The IMF chief also emphasized that Asia should nurture its domestic investment and consumption as its "second engine of growth," saying that it would be more crucial when its traditional means of growth, such as exports to advanced nations, are now facing a slump.

Asia's role in the global economy needs to be reflected in voice and representation in global financial institutions, he noted, adding that his organization is "now working to complete the realignment of voting power by the end of November this year."

"We are now working on a second stage -- to be completed by the G-20 summit in Seoul this November -- that will do even more to help align Asia's representation in the Fund with its economic weight in the world," he said.

Meanwhile, at the same conference co-hosted by the IMF and the government here, South Korea's Finance Minister Yoon Jeung-hyun said that the IMF's role should change in Asia, calling for more efforts to be made in reflecting the region's increased "clout and responsibilities" in the global community.

"Up until now, it seems that the IMF has not fully assumed its role of ensuring macroeconomic stability and supporting economic development in Asian developing countries," Yoon said.

"I believe the IMF has an important contribution to make by proposing and enacting concrete and realistic measures to strengthen financial safety nets around the globe," he added.