Financing Asia's future growth

In this seminar, the lead author of the Asian Development Outlook (ADO) 2015 theme chapter will present its main findings and policy messages. ADO is the annual flagship report of the Asian Development Bank (ADB).

Against the backdrop of Asia’s growth slowdown since the global financial crisis, this theme chapter explores the role of a sound and efficient financial system in sustaining the region’s future growth.

An efficient financial sector is needed for developing Asia to maintain growth into the future. As countries develop, the ability to enhance productivity through the adoption of existing technologies and  reallocation of resources across sectors becomes harder. To support growth, the region’s financial sector will thus have to develop further to help increase both investment and productivity.

Yet as the global financial crisis made painfully clear, financial instability can undermine growth, even undercutting an economy’s long-term potential. Thus, developing Asian countries must strengthen financial stability, for example through better regulation, so that the financial sector does not in itself become a source of growth-harming volatility.

Moreover, in light of rising inequality in Asia, the finance sector must become an agent of greater inclusion. To make growth more inclusive, the region’s policy makers will be challenged to find ways to extend access to finance to the poor and to small and medium enterprises.

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