Asia’s economy has grown by about 6 percent a year over the last 25 years but the rising income inequality has raised concerns about inclusive growth, says Christine Lagarde, managing director of the International Monetary Fund.
Addressing the launch of a three-day conference: ‘Advancing Asia: Investing for the Future’ Lagarde said despite the progress, income inequality has crept up in 15 of the 22 Asian economies, referring to a recent IMF working paper.
Asia remains home to two-thirds of the world’s poor, many of whom live in India. In most of the region, women and youth are still greatly underrepresented in the labor market.
However, these concerns can be opportunities, Lagarde said.
“What if income inequality could be reversed, poverty further reduced, and women and young people economically empowered? What if growth could be made more inclusive and sustainable? What if Asia’s 4.4 billion people could each realize their full potential?”
“We can imagine the possibilities. The question is how to realize them,” she said, while suggesting for broadening access to services like health and finance, and targeting social spending on the neediest.
She recommended supportive monetary policy and growth-friendly fiscal measures to safeguard financial stability, and above all, structural reforms to boost competitiveness, growth and jobs.
Meanwhile, the IMF has agreed to establish an integrated capacity development centre called the South Asia Regional Training and Technical Assistance Centre (SARTTAC) in the Indian capital of New Delhi to cater to the training needs of South Asian countries, including Sri Lanka.
The SARTTAC will be the first of its kind to be set up by the IMF, and will address training needs and respond to demand for IMF’s technical assistance in six South Asian countries — Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka. “It will fully integrate training and technical assistance and is a model for our future capacity development work,” Lagarde said.
The SARTTAC is expected to become the focal point for planning, coordinating and implementing IMF’s capacity development activities in South Asia, including macroeconomic and fiscal management, monetary operations, financial sector regulation and supervision and macroeconomic statistics.
The SARTTAC will offer courses and seminars for policymakers and other government agencies in the six South Asian countries.