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Asia’s remarkable economic recovery and resilience to external shocks in the decade after the crippling financial crisis magnifies the value of regional economic cooperation and integration, Asian Development Bank (ADB) President Haruhiko Kuroda said at an international symposium ‘Asia is Moving Forward: Ten Years After the Crisis’ held earlier this month in Manila. He stated that the region was constructing a common agenda to guide it forward through a commitment to adaptation, reform, and preparedness.
“The evolving global economic environment, cross-border production networks, and the advances in information technology helped leaders recognize the need to work together to build better resilience to potential shocks—both external and internal,” said Mr. Kuroda.
A decade after the crisis, Asia has once again emerged as the fastest growing region in the world. Policymakers in the crisis-hit Asian economies turned the crisis into an opportunity to usher in bold economic reforms and revived the region’s economic dynamism. Many had predicted that the region would take a few generations to recover.
While trend growth rates in the five crisis-hit countries still remain below their pre-crisis levels, their per capita incomes now surpass their pre-crisis levels, social indicators are improving, and the region is enjoying robust growth.
Developing Asia’s growth performance in 2006 was eye-catching as the region expanded at a blistering pace of 8.3 percent, the fastest growth since 1995. The emergence of the People’s Republic of China and India as economic powerhouses has added a new dimension to regional and global growth.
Asian economies are now forging closer regional economic cooperation, through market-led and government driven initiatives. Closer regional economic cooperation is providing a new platform and laying the foundation for robust economic growth in the region.
Today, Asia faces a different set of challenges. Massive capital inflows as opposed to outflows in 1997, its impact on regional currencies, global imbalances and rising foreign exchange reserves are some of the key challenges facing the region’s policymakers.
Development of stronger capital markets, meeting the region’s massive demand for infrastructure and the issue of rising income and social inequalities which pose risks to the growing prosperity of the region are issues that need immediate attention.
The trend of increased market-led integration is spurring greater cooperation among governments in Asia and the Pacific. Asian economies are now moving towards the creation of a new regional economic architecture.
The panelists concurred that Asia has come a long way ten years after the crisis and now is the time to build on the achievements in regional economic cooperation and integration.
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ADB Supports
Tax Reforms in India
An international tax conference on ‘Tax Reform in India - Achievements and Challenges’, organized by the Department of Revenue, Ministry of Finance, Government of India, Asian Development Bank (ADB), and the Organization for Economic Cooperation and Development (OECD), under ADB’s technical assistance (TA) project, “Capacity Building for Tax Administration”, concluded recently in New Delhi. The conference provided an opportunity to the Central Board of Direct Taxes (CBDT) and the Central Board of Excise and Customs (CBEC), Government of India, to discuss the tax reforms undertaken by them with a wide group of international and national tax experts, and to draw on cross-country experience and best practices. Forty five international tax experts attended the conference.
ADB has been working with the Centre for Tax Policy and Administration, OECD, to provide support to CBDT and CBEC in areas pertaining to transfer pricing policy, international taxation, and customs valuation. The strengthening of the legislative and institutional framework in these areas will help to prepare India’s tax system in meeting the demands of its fast-globalizing economy.
The conference provided an excellent forum for exchange of knowledge and cross country experience on tax issues. In his valedictory address, India’s Minister of State for Revenue, S. S. Palanimanickam noted that the ideas and suggestions that came up at the conference would be examined by the Government in further detail. He hoped that many of these would over time, fructify into real changes in legislation, procedures, or work processes.
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