Productivity boost
Asian countries need a major turnaround to revive its lost dynamism in order to keep up with the rapid recovery of more advanced economies
There are plenty of signs that growth prospects in the world's advanced economies are rebounding fast - and the nature of those recoveries are such that they pile the pressure on Asia to turn around falling productivity to rekindle the dynamism it has lost.
There are four reasons why growth prospects in this region remain subdued.
First is the relatively soft support coming from export growth.
Yes, improving performance in developed economies should provide a cyclical uplift to Asian exports, but the still substantial overhang of deleveraging that remains in the wake of the financial crisis means consumer demand growth in the US and Europe will be below trend.
Developed nations are making a transition towards stronger, sounder and more sustainable expansion that is driven by capital spending, not the final consumer demand that export-oriented economies thrive on.
Productivity dynamic in the region has been extremely weak over the past six years
Meanwhile, Asia ex-Japan economies have also lost export competitiveness as their currencies have appreciated in real terms, so while exports growth for the region should improve in the next 12 months, it is likely to be in the range of 5 per cent to 10 per cent year on year, versus the 21 per cent rate during 2003-07.