of financial markets and institutions are yet to be fully transparent. there a feeling that full normalcy is yet to be restored in the global financial markets. the impact on the real economy in the usa is yet to be fully felt and a possible slow down in that economy is not ruled out. while neither financial contagion nor slow down in the us economy is ruled out, the global consensus, as of now, is that global growth will be robust as anticipated, but with heightened uncertainties. at this stage, therefore, we can make only a few very broad observations on the likely impact of global financial conditions on asia. the economic reforms in the real sector have improved the overall productivity and resilience in asia. the macro economic conditions in asia, as a whole, are significantly stronger and conducive to overall stability relative to the past. the financial systems in most countries, both markets and institutions, are far more efficient and resilient than before. the external sector has been strengthened and considerable reserves provide cushions to withstand financial contagion. in fact, it is felt by many, that asia ’ s reserves can help smoothen the process of unwinding of global imbalances that appears to be underway through, what has been described as “ falling with a parachute " scenario. overall, the economies in asia seem to be reasonably equipped to withstand, to some extent, heightened volatilities in most of the financial markets. the possible impact of adverse developments, if they happen, on the real sector is, however, less clear. while some hold that any slow down in the us will impact asia adversely, since asia ’ s exports to the us are large, others hold that some “ de - coupling ” has occurred in view of the growing intra - asia regional trade. it is also argued that intra - regional trade in asia is linked to exports to the us. a more plausible scenario would be that slow down in the us, if it takes place, would, to some extent, dampen the growth in asian economies, but to the extent there has been some elements of decoupling, which may be country specific also, the impact may be moderated. in other words, it will be unrealistic to hold that asia can substitute for the us as the major engine of global growth at this stage. hence, heightened vigilance among asian central banks appears to be common. we, in india, are monitoring ( a ) the process of restoration

’ s desperately poor live in asia. according to the asian development bank ( adb ), 620 million people within the region are still living on less than one us dollar per day and if we raise the limit to two us dollars per day, the number would be more than a billion. hence, a policy of inclusive growth becomes critical and, indeed, essential. second, the share of asia in billionaires and high networth individuals ( hnis ), relative to other regions, is growing disproportionately, which could flag concerns regarding maintenance of social and political stability. the consequences of growing regional inequalities are being felt in several asian economies. there is evidence of several policy initiatives in this regard also. third, the urban population in asia may double by the year 2030 relative to the year 2000. by 2030, asia will have about 2. 7 billion urban people, while all other regions in the world will have a combined urban population of about 2. 3 billion. this will result in large demands on urban infrastructure. at the same time, due to globalisation and growth experiences, the urban residents will be more demanding in regard to quality of urban infrastructure and services. hence, public - private participation, cutting across national boundaries, may become significant. fourth, the demographic trends in asia over the next 50 years are expected to be reflective of the past 50 years for developed countries, with significant divergence among the various asian economies. the expected increase in old age dependency during 2000 to 2025, and further on to 2050, may increase fiscal pressures. however, countries such as india and indonesia are expected to reap benefits of demographic dividend over a longer period ahead, than the other asian economies, perhaps for another 25 years. reaping benefits of demographic dividend is dependent upon enhancing quality of health conditions, imparting better skills and improving public infrastructure so as to take advantage of globalisation. in the absence of appropriate public - policy initiatives, what could be a demographic dividend could turn out to be a demographic problem. finally, the global community has to address the issue of adequacy of voice and representation to a rising asia in the current international financial architecture. in other words, governance structures and arrangements need to reflect the new realities of a rapidly growing asia, in the interests of all stake holders. an issue of contemporary importance is the possible interaction between recent events in global financial markets and asia. as of now, all relevant aspects