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Asia and the IMF: A Closer Engagement

In just a few days’ time, the Korean government and the IMF will jointly host a high-level international conference in Daejeon, Korea. At the Fund, we are trying continually to enhance our strategic dialogue with Asia, and the conference is an important part of this effort.

Asia’s leadership of the global recovery is undeniable, as I have said in earlier blogs. And the extensive reforms and improved macroeconomic policy frameworks that underpinned the region’s remarkable resilience to the global crisis will see Asia’s successes continue. In just two short decades, we expect it to become the largest economic region in the world.

The Korea conference will be an opportunity to showcase Asia’s economic successes, and also highlight the importance of regional integration and cooperation, which has been growing rapidly in Asia.

A shared vision for Asia’s future

Underpinning all the conference sessions is a recognition of Asia’s role as an important global economic actor and its growing role in international policymaking. But each session will delve deeper into aspects of how Asian and international policymakers alike can benefit from Asia’s experiences.

In Daejeon, Asia-Pacific economic policymakers, private sector leaders, prominent academics, and experts from regional and international institutions will bring their unique and extensive experiences together to examine these issues. Discussions are expected to be wide-ranging.

The first plenary session—The Global Economic Crisis: Asia’s Resilience, Lessons, and the Challenges Ahead—will help frame these discussions. Here, IMF Managing Director Dominique Strauss-Kahn will be joined, among others, by Dong-Soo Chin (Chairman of Korea’s Financial Services Commission) and Y.V. Reddy (former Reserve Bank of India Governor). They will reflect on the role of reforms and strong policy frameworks in ensuring Asia’s resilience, and look forward to find new drivers of growth that can help sustain Asia’s performance and rebalance the global economy.

Asian countries’ successes in reforming their financial systems will feature prominently in the session on Financial Sector Issues and Global Financial Safety Net. Panelists including Changyong Rhee (Secretary General of the Presidential Committee for the G-20 Summit) and Amando M. Tetangco Jr. (Governor of the Bangko Sentral ng Pilipinas) will also explore the need to improve global financial safety nets, drawing on the experience of Asia’s regional financial safety nets.

Another key theme will be how to sustain rapid and inclusive economic growth in Asia. IMF Special Advisor Min Zhu will open the session on Transforming Asia’s Low Income Countries into Tomorrow’s Emerging Markets, which will examine Asia’s growth model and how Asia’s low-income countries can improve their growth prospects, drawing on the experiences of today’s emerging markets.

It is important for Asia and the global community, including the Fund, to work constructively and collaboratively as Asia grows, and to recognize that Asia’s rapid transformation over the next generation will have implications that extend well beyond the region itself. The session Growing Asian Integration and Global Governance—moderated by Yanqing Yang, Managing Editor of the China Business Network—will touch on these issues, as well as on the importance of improving Asia’s representation in line with its growing economic power.

Personally, I am looking forward to the session, in which I am participating, on Asia and the IMF. I will be joined by esteemed panelists, such as Professor Yung Chul Park (Korea University), Professor David Li Daokui (Tsinghua University), and Professor Eisuke Sakakibara (Aoyama Gakuin University).

The IMF and Asia: the importance of working together

I think it is particularly important for the Fund to listen to Asian leaders—both in the public and private sectors—and engage in a close discussion on the future of Asia, its prospects and challenges, and the implications of its transformation for the rest of the world. The conference provides an opportunity for the Fund to reflect on these views, and communicate more broadly how we can strengthen our dialogue with the region and work as a partner with Asia in realizing Asia’s own vision for the future.

Indeed, a key challenge is to improve the understanding in Asia of the broadening range of the Fund’s work, including our growing emphasis on multilateral and regional surveillance, cross-border linkages and spillovers, financial interconnectedness, and analysis of vulnerabilities, such as our Early Warning Exercise. These efforts complement our technical assistance and program engagement, where too our access and flexibility has greatly changed and expanded.

We must ensure that Asia-Fund engagement is a two-way partnership, where the Fund benefits from the insights we get from policymakers, academics and other experts in Asia, and in turn the Fund is able to contribute to Asian policymaking by providing a global perspective.

In order to do this well, we need to continue building our presence in Asia, reach out much more across our stakeholders, and have an active engagement in the region. The conference is thus a big step for us and we very much look forward to the discussion.