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Interview: Haruhiko Kuroda

Jan. 4, 2013

Asia is playing an increasingly important role in the global economy. But the question is whether the region can sustain its growth. NHK WORLD asked Haruhiko Kuroda, the President of the ADB for his views.

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Haruhiko Kuroda

President, Asian Development Bank

While the global economic outlook remains uncertain, the ADB president says the Asian region remains the bright spot.

"The Asian economy would recover to some extent. Compared with US and Europe, and also compared with Latin America and Africa and Middle East, Asia would be the fastest growing economy in the world."

In contrast, the Japanese economy is showing signs of weakness. The new Prime Minister, Shinzo Abe, says one of his top priorities is to pull the nation out of deflation.

With the incoming new administration, how could Japan deal with it?

"I think the monetary policy always has some side effect, I understand, but what you have to recall is that what is the alternative? So, Bank of Japan not just setting inflation target, but also mobilize all measures, policy measures, and in particular commit itself to do in an unlimited way, I mean, to achieve the objective of three percent inflation rate, they should do anything, and in whatever amount. "

Turning to China ...Many economists say the slowdown in the world's second largest economy has bottomed out. Kuroda shares that view, but he notes that China's economic vitality won't just continue, long term.

"We expect in the short to medium term, around eight percent growth is quite possible for the Chinese economy. But the issue is long term. Labor force will soon start to decline in China. Chinese economy cannot enjoy demographic dividend anymore in the next decade or decades."

How should Asia be prepared when China slows down?

"India would become the next leader of Asia's growth because India has a large population, and its per capita income is still relatively low. That means that there is huge room for catching up. And of course there are Pakistan, Bangladesh, Vietnam, many counties in Asia, so, I'm quite optimistic about the long term growth prospect of Asia as a whole."

The Asian economy has stayed relatively firm despite a recession in Europe and a slowdown in the US. But Kuroda points out that more cooperation is needed in the region to prepare for further headwinds.

"I think ASEAN plus three countries should better coordinate more to try to stabilize interregional exchange rate relationship. Most of ASEAN counties have no capital control: capital can flow in, flow out freely. ADB has been at the center of regional cooperation in Asia, and ADB as a regional development bank will continue to be so or even strengthen its activities in the area of regional cooperation and integration."

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