The new issue of the IMF’s Finance & Development magazine explores how Asia is moving into a leadership role in the world economy. Anoop Singh, Director of the IMF’s Asia and Pacific Department, says that, based on expected trends, within five years Asia’s economy will be about 50 percent larger than it is today and be comparable in size to the economies of the United States and Europe.
The issue looks at Asia’s biggest economy, China, which has relied heavily on exports to grow, and its need to increase domestic demand and to promote global integration if it is to continue to thrive. China is not the only Asian economy that heavily depends on exports and all of them might take some cues from the region’s second-biggest economy, India, which has a highly developed services sector.
The magazine also covers how best to reform central banking in the aftermath of the global economic crisis; the pernicious effects of derivatives trading on municipal government finances in Europe and the United States; and some ominous news for governments hoping to rely on better times to help them reduce their debt burdens.
Mohamed El-Erian argues that sovereign wealth funds are well-placed to navigate the new global economy that will emerge following the world wide recession. “Back to Basics” explains supply and demand. “Data Spotlight” explores the continuing weakness in bank credit. And “Picture This” focuses on the high, and growing, cost of energy subsidies.
Highlights of the magazine
Asia Leading the Way
By Anoop Singh
Based on expected trends, within five years Asia’s economy will be about 50 percent larger than it is today and be comparable in size to the economies of the United States and Europe.
A Stronger China
By Linda Yueh
China can emerge from the crisis stronger if it increases domestic demand and promotes global integration.
Min Zhu on Asia’s Economy and More
The new Special Advisor to the IMF Managing Director talks about Asia in the new world order, global economic issues, and the IMF’s relations with the region.
Deeper Markets, Cheaper Capital
By Sanjay Kalra
Financial sector reforms can help reduce the cost of capital, spur investment, and promote rebalancing in Asia.
Serving Up Growth
By Olaf Unteroberdoerster
Promoting the services sector in Asia is another way to restore balance and boost growth.
People in Economics: The Unlikely Revolutionary
Hyun-Sung Khang profiles Jang Hasung, Korean crusader for better corporate governance.
Also in the Issue
After the Fall
By Eswar Prasad
As the debate over how best to manage monetary policy is heating up, the once-sharp difference between advanced and emerging economies is blurring.
Redefining Central Banking
By Duvvuri Subbarao
Central banks must distill lessons from the global crisis and make concrete reforms.
Principles for Reform
By William Poole
In designing new policies for the financial sector, old-fashioned ideas are important.
Debt and Democracy
By Rabah Arezki and Markus Brückner
Democracies use windfalls from international commodity price booms to reduce external debt. Autocracies tend to spend them.
By Randall Dodd
Local governments on both sides of the Atlantic found themselves in a financial mess after engaging in derivatives transactions.
Lowering Public Debt
By Harald Finger and Azim Sadikov
Many countries have slashed their public debt ratios in the past, often thanks to favorable macroeconomic conditions. They may be less lucky in the future.
Reducing the Staggering Costs of Cheap Energy
By Dominique Guillaume and Roman Zytek
Eliminating domestic energy subsidies is tricky, but oil-exporting countries that do so will see a clear payoff.
Sovereign Wealth Funds in the New Normal
By Mohamed A. El-Erian
As the global financial crisis recedes, state-owned investment companies are well placed to seize a new set of opportunities andnavigate changing risks.
Searching for Stability
By Bas B. Bakker and Anne-Marie Gulde
Eastern Europe rode a decade-long boom into a serious bust and now must figure out how to restart growth on a more even keel.