MANILA, Philippines - Countries in developing Asia including the Philippines must focus on implementing long-term structural reforms even as they try to insulate themselves from the possible escalation of the global financial crisis, an Asian Development Bank (ADB) report said Thursday.
The report, titled "How Can Asia Respond to Global Economic Crisis and Transformation" said "the region must update its growth model to accommodate a 'new normal' - prolonged restructuring in advanced economies - and surmount obstacles to sustained and equitable growth in developing Asia."
Asia must create a breakwater to ward off the adverse effects of the global financial meltdown, Jeffrey Sachs, director of United States-based The Earth Institute said in a media briefing at the ADB's 45th annual board of governors meeting.
"Global growth depends more than ever on Asia," Sachs, who was a former candidate for World Bank president said.
He said growth in emerging Asia can either be consumer- or investment-led, with governments providing infrastructure such as housing, roads, power, information and communications technology, climate resilience measures and anti-pollution programs.
In addition, the report said Asia must invest more on human development and social services, along with implementing measures that include strengthening financial markets, improving the business climate, uprading industries, boosting intra-regional trade and deepening regional cooperation and integration.
Sachs added that the countries in the region must sustain their export growth despite slow-growing Western markets and their protectionist tendencies.
He said Asia should consider Africa, capable of growing an average of 8 percent yearly, as an alternative to its US and European markets..
"With proper financing, Africa, too, can be an export market," Sachs said.
He added that the countries in the Eurozone currently suffer from budget deficits which lead to budget cuts that further the crisis, while the US economy is structurally imbalanced.