Report Urges Better Government

Asias increasingly complex economies cannot be managed from the centre alone, and their increasingly pluralist societies will not be content with top-down government, the banks report on Emerging Asia said. The report does not formally represent the views of the bank itself, but rather of the outside team of economists called in to write it. Yet officials said that the sentiments were in line with the banks view that good government was a pre-requisite for sustained development.

Setting out the conditions under which Asia could maintain its high growth record, the report said another challenge facing Asian governments over coming decades was to tread a delicate line between fiscal responsibility and demands from a more affluent public for better health, education, welfare and for a better quality of the environment. This could only be achieved by a new relationship between government and the private sector.

 

Mutual trust and dialogue must replace suspicion and diktat. Greater openness and disclosure is also needed to ensure that the interests of regulated enterprises do not take precedence over those of the communities they are intended to serve, the report said. Asia has to adapt to a twin-track approach, the first track stressing growth and globalisation and the second stressing human development and civil rights, P Chidambaram, finance minister, told a seminar to mark the reports launch. The report is generally optimistic about Asias economic prospects, though it says growth may taper off in the newly industrialised economies of east Asia as their populations age. By contrast south Asia, which has lagged hitherto, could see growth accelerate given deregulation which would make its economies more competitive and the advantage of a dynamic young population.

But this assumes governments can rise to the challenges raised by a more affluent and demanding population, particularly on the environment. The point may not be too far off when Asias polluted environment will act as a brake on its growth, it said.

Of the worlds 15 most polluted cities, 13 are in Asia. Government monopolies over drinking water, sewerage and clean air cannot generate the right response, the report said. Instead it called for the private sector to provide the necessary environmental infrastructure and contribute to the conservation and management of natural resources. The role of governments in setting environmental priorities and enforcing them should be strengthened. Copyright Financial Times Limited 1997.