Tokyo continues to be my favourite city. Every visit, including the one last week, reinforces this feeling. The UBS Asian Investors Forum 2007, held under the broad theme of ‘Capturing Asian Growth — opportunities and risks’ and at which I was keynote speaker, brought together a broad spectrum of academics, experts and policy interlocutors.

Before I write about the conference, let me comment about a new Tokyo in the making. I was struck by a massive redevelopment programme with spectacular new buildings. Mitsui Fudosan is about to commence the biggest urban renewal project that will boast of Tokyo’s tallest building, with a new art museum, a five-star hotel, a park and other associated amenities.

Tokyo is busy fostering mixed-land use, which combines culture with accommodation, shopping with gardens, and retail outlets with sports complexes. No doubt the Japanese have excessively believed in a form of Keynesian economics where large public outlays have promoted almost a construction mania all over Japan in a bid to reverse their prolonged stagflation.

The conference itself was about the strength of Asia and what was described as an Asian rebound from the lost decade of the nineties, which commenced with a bursting of the Japanese bubble economy, the Korean stagnation, India’s balance-payments crisis in 1991 and subsequently the Asian crisis of 1997. On every reckoning, there was now an Asian resurgence marked by increased structural savings and higher investment, a deeper export commitment seeking global opportunities and a stronger movement for improved governance.

The bad news for Asia, of course, was that nothing was cheap any more and costs were rising faster than productivity while increased global integration enhanced risks of volatility.

... contd.