ADB forms new policy advisory group

The Asian Development Bank is set to form an international body that will recommend ways for Asian countries, which are showing signs of a slowdown, to weather the ill-effects of the global economic turmoil.

The body, called the International Policy Advisory Group (IPAG), will gather economic and financial experts who will study how Asian countries can sustain decent growth rates despite the economic woes of industrialized countries.

ADB will allocate a $1.245-million technical assistance fund to implement the project.

Some of the policy recommendations that IPAG is expected to come out with will touch on increasing regional integration, in terms of trade in goods and financial linkages.

Asian policymakers agree that the issues confronting the US and the Euro zone economies have prompted Asian economies to be even less dependent on the West for their economic performance.

The United States and European countries continue to be significant export markets for Asian countries like the Philippines, and the economic woes in the West have led to shrinking export income and slowing growth in Asia.

Policymakers in Asia likewise agree that there is a need to strengthen the financial relationship of countries in the region to mitigate the adverse effects of the global turmoil on the financial sector.

IPAG is also expected to come up with recommendations on how to further strengthen the Chiang Mai Initiative (CMI), under which Asian countries are able to borrow dollars from one another in times of balance of payment deficits.

“Global economic challenges and opportunities are in a continuous state of flux, testing the global economy’s capacity to adapt to evolving risks and priorities. The recent financial crisis led to a major reassessment of the global economic and financial architecture, and calls for more sustainable and inclusive growth in the face of a changing natural environment have gathered momentum,” ADB said in a report.