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Rapid Growth Forecast for Asian Economies - 2004-08-11

Asian economies are likely to grow rapidly over the coming years, with India and China leading the way, according to experts. But delegates at a conference in the Malaysian capital Kuala Lumpur warn that security and poverty are stumbling blocks.

The Philippines-based Asian Development Bank is forecasting that economies in East Asia will grow by nearly seven percent a year in 2004 and 2005. As fast as that sounds, many economists at this year's Asia Economic Summit have been just as bullish.

Asia has been growing rapidly for years, but growth now is not due to exports to the United States, but to Asian consumers, especially those in China, reaching into their own pockets.

Mr. Naoki Tanaka, president of Japanese research group 21st Century Public Policy Institute, says that even his country, a long-time economic laggard, is finally on course helped along by rising demand from China and massive increases in efficiency at home.

"Investment for plant and equipment initiated this process," he said. "So it's a very new phase for the Japanese economy."

But despite the emergence of China as a major economic force, challenges remain.

Mr. Mohamed Jawhar Hassan, the director general of Kuala Lumpur Institute of Strategic and International Studies, says that despite rapidly declining poverty across the region, the remnants of extreme poverty could destabilize future growth.

"It is no coincidence, for instance, that the security situation in the Philippines and Thailand is greatest in the areas of greatest relative poverty," he said.

But analysts at the conference were mostly optimistic about the region's future, saying that good cooperation among Asian countries should head off catastrophes before they arise.