Singapore, March 8:

Asian economies including Thailand and the Philippines, which are beset by political turmoil, will grow strongly this year despite high oil prices and interest rate hikes, the Asian Development Bank’s vice-president said on Wednesday.

Regional giants China and India as well as rising Southeast Asian star Vietnam are expected to be among the best performers, Jin Liqun said in an interview with AFP. The ADB has said East Asia, excluding Japan, will grow by 7.2 per cent this year.

Economic growth will vary between countries, but “ADB is quite upbeat overall,” said Jin, who was China’s vice-minister of finance before his appointment to the Manila-based development bank in 2003.

“China’s target is 8.0 per cent, India at least 8.0 per cent. When you take these major economies into account, overall the growth rate will be pretty high,” he said, but “there might be some countries whose growth rates might be a bit lower.” Pakistan is also expected to post strong growth, while the Vietnamese economy, which expanded by 8.4 per cent in 2005, should maintain or even exceed that performance, Jin said.

He added that political unrest is unlikely to derail economic growth in Thailand and the Philippines, where Prime Minister Thaksin Shinawatra and President Gloria Arroyo, respectively, are facing threats to their leadership.

“My prediction is this will not affect the growth rate of these two economies. So overall, I think Asia’s growth remains quite strong,” he said.

“Basically, I think the (two) economies are running on their own and the major economic policies remain intact,” said Jin in the interview ahead of a conference on the infrastructure needs of the Mekong subregion.

“In the Philippines, even though there might be still minor unrest, this is not going to affect the whole country. Living in the Philippines, I have this feeling,” said Jin, whose Manila office is near the site of some recent street protests against Arroyo. Last Friday she lifted a state of national emergency declared after an alleged coup plot. Thai Prime Minister Thaksin Shinawatra, facing weekly protests against his rule, has called snap elections for April 2 but leading opposition parties have announced a boycott of the polls.

“In Thailand, I think this problem could be resolved... whatever happens, major policies will not change.” Jin said oil prices, currently above 61 dollars a barrel, and a creeping rise in interest rates would not derail Asia’s economic growth.

“Oil prices would impact upon economies, but this impact has been going on for quite some time and people are quickly adjusting,” he said, pointing out that the current situation was unlike the oil shock in the 1970s. China, whose insatiable energy needs have helped drive up oil prices, is among the countries trying to diversify oil and gas sources, Jin said.

On interest rates, Jin said he does not expect any sharp increases that would suddenly fuel inflation. “Interest rates might go up, but my prediction is that even this kind of creeping interest rate rise will not be drastic. It will be, in my view, mild and gradual so the market can adjust,” he said.

The US trade deficit with the rest of the world, including Asia, should also not be a problem as “many countries are working towards achieving some solution,” Jin said. Asian countries are increasing trade among themselves, and the trend is expected to continue with the signing of a web of bilateral and regional free trade agreements. “Asian countries should improve their regional trade to increase the depth, and breadth of the market,” he said.

But it is also in the interest of developed nations like the United States to restructure their economies in order to better compete with textiles and other Asian exports instead of imposing curbs, Jin said.