Beyond the Crisis: Toward Balanced and Sustainable Growth

The global financial crisis of 2007–2009 shattered Asia’s complacency regarding the sustainability of its export-led growth strategy. The sharp decline in the region’s economic expansion in 2009 arising from the collapse in developed countries’ demand for its exports highlighted the need for a more balanced structure for Asian economies that is less dependent on external demand—particularly from the US and the European Union—and more reliant on domestic and regional demand. Asian economies should contribute to global economic adjustment by creating their own growth engines and transform themselves into a large consumer market, while maintaining their competitiveness as the world’s factory. The global financial crisis provided Asian countries with an opportunity to bring regional policy coordination and cooperation to the next level. Asia’s future growth must be balanced, sustainable, and supportive of the global economy. This includes implementing measures to encourage rebalancing of production, expanding social protection, deepening the financial system, and forging regional cooperation.