BOJ's Kuroda calls for more digitalisation, reform in Asia
By Leika Kihara
TOKYO (Reuters) - Asia needs to accelerate digitization and corporate reform to address the challenges of sustainable growth, Bank of Japan Governor Haruhiko Kuroda said on Wednesday, highlighting the weaknesses in supply chains and social infrastructure.
Kuroda said economic conditions in Asia remain difficult as a full recovery in global growth appears "much further down" after the COVID-19 pandemic.
However, the downturn in the Asian economy was moderate compared to other regions, partly due to the solid global demand for IT-related goods manufactured in the region.
"In the long term, Asia will have to face its challenges in order to achieve sustainable economic growth," as Kuroda said it has low productivity in the service sector and an aging population. Digitization is one of the key factors here, he added.
"Japan is one of the fastest aging societies, and we discussed how to address the problems of an aging society," said Kuroda.
"I'm not that pessimistic about the impact of the aging population ... Promoting digitization will be a driving force behind increasing potential for growth," he said at a virtual meeting of the US National Association for Business Economics .
Japan's new Prime Minister Yoshihide Suga has made digitization a central political issue as measures to prevent the virus from spreading from home and social distancing increase the need to accelerate reforms on that front.
The pandemic has also exposed vulnerabilities in Asia's supply chain networks, although many companies are already making efforts to diversify manufacturing and sourcing, Kuroda said.
Business reform to adapt to changing consumer trends such as increased demand for e-commerce and online health services could boost the productivity of the Asian service sector, said Kuroda, former head of the Asian Development Bank.
(Reporting by Leika Kihara; editing by Chang-Ran Kim and Christopher Cushing)
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