ASTANA – High-level policymakers and market experts at the governor’s seminar, “Reducing Vulnerability: Learning From Past Crises,” during the Asian Development Bank’s (ADB) 47th annual meeting in Astana’s Palace of Independence on May 3 addressed the importance of a fundamentally sound economy in a crisis.
“Regardless of the level of development, a country risks being destabilised by a financial shock when its financial system is not well-regulated and when effective macro-prudential measures are absent,” said ADB President Takehiko Nakao in the seminar. “To prevent future crises, and to protect their gains in poverty reduction, Asian countries must learn from past crises and continue their efforts to strengthen economic fundamentals and financial systems.”
Panelists discussed the importance of good economic fundamentals, better cross-border coordination of macroeconomic policies, sound financial regulation, speedy responses at times of crisis and the role of regional financial and monetary cooperation in reducing vulnerability.
“Since the 1997 financial crisis, developing Asia has strengthened its financial systems and corporate governance. However, the financial turbulence that affected some Asian economies last year, following the U.S. signal of a possible tapering of its quantitative easing programme, reminds us that the region remains vulnerable to external shocks. Asia needs to continue to grow strongly if many of its low-income countries are to graduate to middle income status; if middle-income countries are to avoid the middle-income trap; and if the region is to continue to make gains in reducing extreme poverty. To achieve these goals it is critical that financial crises do not reoccur,” read an ADB press release.
Many countries in developing Asia have taken the right steps in strengthening their financial systems, banks and corporate governance since the 1997 Asian financial crisis. “The region is now in a much better position to weather external shocks,” Nakao said.
Several of the panelists said that countries heavily dependent on natural resources must work harder to diversify their economies in order to become more resilient.
Panelists at the seminar included Nakao; Muhamad Chatib Basri, Indonesia’s minister of finance; Yerbolat Dossayev, Kazakhstan’s minister of economy and budget planning; Marisa Lago, assistant secretary for international markets and development at the U.S. Department of the Treasury; Arvind Mayaram, India’s finance secretary and Yoshiki Takeuchi, deputy director general of the international bureau in Japan’s Ministry of Finance.
Kazakhstan’s capital hosted the Annual Meeting of the ADB Board of Governors for the first time from May 2-5.