Tashkent, Uzbekistan (UzDaily.com) -- Developing Asian economies need to make growth more inclusive and sustainable with less income inequality and environmental degradation, says a forthcoming book by the Asian Development Bank (ADB) and the Asian Development Bank Institute (ADBI).

The book, Rebalancing for Sustainable Growth: Asia’s Postcrisis Challenge, argues that Asian economies export-led growth model, which was so spectacularly successful in Asia in earlier decades, has significant limits. Asia now needs to rebalance growth by adopting policies to promote a greater reliance on domestic and regional demand. Balanced growth, the book says, means growth that is consistent with smaller global imbalances and is less dependent on exports, as well as growth that is inclusive and environmentally sustainable.

"Although Asian economies have begun to recover from the global financial crisis, the longer-term implications of the crisis for Asia are perhaps even greater than the short-term ones," said ADB Vice-President Laurence Greenwood, who introduced the book at ADB’s 43rd Annual Meeting in Tashkent. "The period of rapid Asian export growth was, at least in its later stages, accompanied by a sharp worsening of global payments imbalances, which contributed to the global financial crisis. Asia’s future growth path needs to avoid such large and risky imbalances."

Mr. Greenwood said that the aftermath of the global financial crisis provides an opportunity to correct distortions and develop policy measures to support more balanced and sustainable growth.

Some of the book’s key recommendations to achieve these goals include:

• Establish an effective framework for monetary, macroprudential, fiscal, and exchange rate policies
• Deepen social protection to support social resilience
• Increase infrastructure investment to create a “seamless Asia”
• Enhance productivity in the services sector
• Establish a region-wide free trade agreement to encourage intraregional trade and investment
• Promote a shift to a low-carbon society and support green growth, and
• Deepen and integrate the financial markets to facilitate the recycling of Asia’s high savings for investment within the region.

"This new development paradigm for Asia could enable the region to not only remain the world’s factory of manufactured products but also become a more important source of global demand," said Masahiro Kawai, Dean of ADBI. "A stronger, balanced, and more resilient economy, with multiple sources of growth, is a foundation for a prosperous Asia and at the same time provides benefits to the global economy."

Tokyo-based ADBI, which is a subsidiary of Asian Development Bank, was established in 1997 to help build up knowledge on poverty reduction and actions needed to support long-term growth in developing economies in Asia and the Pacific.