Although the global financial crisis of 2008-2009 was the worst economic crisis in over 60 years for many industrial countries, most Asian and Pacific developing countries weathered it quite successfully. The resilience of the region is somewhat puzzling at first sight. In an increasingly globalized world, arenít economic shocks supposed to be transmitted faster and farther than ever before? And shouldnít the largest shock affecting the central financial centers of the world cause substantial ripple effects? Yet, even those Asian and Pacific countries that were most exposed to drops in imports from the Western industrial countries and suffered significant drops in economic activity in 2009 recovered briskly in 2010. Furthermore, in contrast to the Asian financial crisis of 1997, no country in the region experienced a collapse of its banking sector or a balance of payments crisis.
Despite this resilience, as ESCAPís Economic and Social Survey of Asia and the Pacific 2011 warns, the regionís economic outlook, though robust, is subject to downside risks posed by rising inflationary pressures driven by high food and energy prices and continued pressures on exchange rates and asset prices emanating from large and volatile capital flows. Such pressures complicate macroeconomic management and make the rebuilding of fiscal space more challenging, as discretionary spending to protect the poor from the impact of high food and energy prices is likely to increase. Beyond the short-run, the key challenge is how to sustain the regionís dynamism in the face of reduced import demand and expected fiscal and balance of payments adjustments in the United States and the Euro Area.
Often times, crises lead to periods of reflection on past actions, to understand what went wrong and what should be done to avoid another crisis in future. In the case of Asia and the Pacific during the global financial crisis of 2008-2009, it is also important to understand what went right and how the region could built on its past resilience to meet the difficult challenges it faces in the short- and medium- to long-run.
Two years after the crisis, we are in a good position to examine in more detail how different countries responded to it and to distill lessons for the future. For that purpose, ESCAP in collaboration with the Bangko Sentral ng Pilipinas, the central bank of the Philippines, is convening thought leaders from different Asia-Pacific countries to discuss
- how the crisis was handled in different countries; - sources of the regionís resilience; - what was different this time compared to the Asian Financial Crisis of 1997-98; - main short-run challenges and how to deal with them; - macroeconomic rebalancing and strategies for robust, inclusive and sustainable growth in the medium- to long-run; and - issues related to the reform of the international financial architecture and the G20 agenda for sustaining strong and balanced growth.