HYDERABAD, India, 6 May 2006 — Indian Prime Minister Manmohan Singh yesterday suggested the establishment of a pan-Asian free trade area and called on the Asian Development Bank to study the benefits of such an economic agglomeration in Asia.

“This pan-Asian FTA could be the future of Asia and will, I am certain, open up new growth avenues for our economies,” he told the opening session of the 39th annual meeting of the board of governors of ADB.

He said India has concluded free trade agreements with SAARC, Singapore and Thailand and was working on similar agreements with ASEAN, Japan, China and South Korea. “India is determined to carry forward India-ASEAN partnership to an enlarged domain for making the 21st century a truly Asian century,” he added.

“With this idea in mind, we have actively pursued external liberalization by cutting down customs duty rates. The current peak rate, at around 12.5 percent, is quite close to ASEAN levels. India has also announced policy objective of aligning its duty rates with ASEAN levels,” he said.

He said his government was linking India into a web of partnerships with Asian countries through free trade and comprehensive economic cooperation agreements. “This web of engagements may herald an eventual free trade area in Asia covering all major Asian economies and possibly extending to Australia and New Zealand,” he pointed out.

Stressing that India has a vital stake in the prosperity and stability of Asia, he said: “We signaled our renewed commitment to regional economic cooperation with our ‘Look East’ policy.

“The policy marked a strategic shift in India’s evolving perspective of the world. It helped pick up the threads from the 1940s and the 1950s when we were actively engaged in building a new Asia.”

As a natural corollary of its ‘Look East’ initiative, India has reiterated its commitment to work with the ASEAN and East Asian countries individually.

Manmohan also called on international financial bodies to “devise credible strategies to enable the world economy to cope with the increased unpredictability and volatility of energy prices.”

His appeal came as oil prices rebounded to above $70 a barrel in Asian trade amid worries over the dispute about Iran’s alleged nuclear weapon ambitions and the separatist threat in oil-producing Nigeria.

Asia needs a security framework to ensure development “is not derailed by the threat of terrorism, the threat to our environment and the threat to our energy security, food security and security of livelihoods,” Manmohan said.

Indian Finance Minister P. Chidambaram said there was high risk to global and regional expansion from oil prices and widening global payment imbalances. “Asian economies will need to be watchful and policymakers must continue to pursue sound macroeconomic policies and structural reforms to sustain growth and weather economic shocks,” Chidambaram said.

ADB President Haruhiko Kuroda told the meeting that Asia’s most “daunting problem” remained poverty despite new prosperity enjoyed by hundreds of millions.

Elsewhere in the city, thousands of protesters marched, accusing ADB of supporting poorly designed projects that have displaced thousands.

Raising slogans such as “ADB go back,” nearly 5,000 protesters walked for almost two kilometers, but were prevented by authorities from reaching the venue of the meeting. Some of them painted the words “ADB Quit India” on their foreheads and bare chests.

The march was organized by The People’s Forum Against ADB, a network of civil society groups and people affected by ADB-aided projects in Asia and the Pacific.

— Additional input from agencies