size, favourable business environment and sound economic management have reinforced the strengths of these economies to take full advantage of the opportunities provided by globalization. i do not see any serious signs of slack in the asean + 3 group. of course, the question of currency alignments will remain highly contentious in the near term. in south asia, liberalization and deregulation have, by and large, removed the incentives for rent seeking activities although the debris has not been completely thrown off the grounds. removal of subsidized credit, reduction in import tariffs, current account and partial capital account liberalization, increased dependence on market mechanism to allocate resources, withdrawal of the government from running businesses have ushered in higher rates of investment, greater efficiency in resource use and promoted more rapid export growth in most of our countries. this raised platform has, therefore, heightened the potential of the south asian economies to achieve accelerated growth and reduction in poverty. while continuation of sound policies and prudent macro economic management is a pre - requisite, there are several challenges ahead which have to be confronted by each of our countries. south asia is still way behind the east asian countries on almost all economic and social indicators. although we started from the same place the divergence over the last forty years has created enormous disparities in the per capita income growth, incidence of poverty, share in global trade, adult literacy, enrolment ratios, status of females, health and well being, physical infrastructure, etc. to give you just one example : our region has almost the same number of people as east asia. but fdi flows to east asian in 2004 were about ten times as high as those to south asia. we have, therefore, a lot of catching up to do and that too, quite fast. the paradigm shift that is taking place in our region makes me confident that we will be able to meet these challenges successfully. but all of us, in whatever capacity we are working, will have to strive hard to bring about the result. in the short run, the impact of uneven monsoons and higher oil prices will have to be managed carefully and inflationary pressures arising from these shocks have to be moderated. fiscal deficits will have to be brought down to manageable levels and business climate will have to be improved by removing bureaucratic controls, hassles and irritants to allow the private sector to operate in a healthy competitive environment. financial sector which is now exposed to international interest rate and exchange rate risks

has to be further solidified. the structural reform agenda of tax administration, trade and tariff policy, labour markets, capital markets, energy sector will have to be implemented more vigorously than has been the case so far. infrastructure bottlenecks, shortages, congestions in form of frequent power break - downs, inadequate gas supplies, inordinate delays in the inland transportation of goods, backlog in clearance at the ports, etc. will have to be tackled effectively in order to allow the growth trajectory to remain on track. intra - regional trade, capital flows, technology transfer and dissemination, exchange of teachers and students at the top universities and research institutions and opening of bank branches among the countries of this region will have tremendous externalities and spillover effects over the long run. the changed perception that the south asian countries are living at peace with each other, facilitate flows of goods, services and people easily, are integrating themselves in the global economy actively will not only reduce the risk premium but pay higher dividends. one specific example which pertains directly to you, the participants of this conference, is the production of qualified accountants and auditors for supply to the advanced countries. since the sarbanes - oaxley legislation and the unfortunate demise of arthur andersen, the demand for accountants and auditors in the usa, uk, and european union has risen substantially. the high quality of professionals from this region has endeared the south asians among the employers in the advanced countries. we should, therefore, attract, train and produce more of them without compromising on the quality. i found out that in pakistan the major constraint was the lack of qualified teachers. i suspect that this may be the case in bangladesh, nepal while india and sri lanka have a surplus of qualified teachers and i stand to be corrected if this is not true. even if there is no overall excess supply of qualified teachers, why can ’ t a body such as safa pool their teaching resources, develop a common curriculum and testing and evaluation procedures, make increased use of videoconferencing, broad band connectivity, electronic discussion groups, virtual teaching and economize on physical presence of the teachers. i am quite sure that if you put your heads together you will be able to come up with a process that will increase the production and supply of qualified professionals in your field ending up with a win - win situation for all the member countries of the south asia region. i leave this thought for your exploration and consideration and,