Previous prudent fiscal policies have allowed an expansionary stance to support the growth while low inflation and excess capacity has allowed for the monetary stimulus. Third, favourable demographic factors The Asian region accounts for more than half of the world’s population and continues to grow at a relatively high and stable rate. Of importance is that the region has a relatively young demographic structure with rising education, which augurs well for securing a large and dynamic labour force going into the future. These favourable demographic prospects of the region increase the potential for creating a consumer group with high purchasing power, thus providing an increased potential for growth in domestic demand. 2  BIS Review 43/2003  Four, rising middle-income consumers Rising income and urban migration in Asia has produced a large and vibrant middle-income group, creating a pivotal change in the pattern of consumption to deliver the positive benefits in domestic demand growth. The cumulative effects of policies that have been implemented previously have resulted in increasing income and living standards and established the foundations to accentuate the transformation of domestic demand in the region. China’s domestic market with a population of more than 1.2 billion, is already the world’s largest market for mobile phones and is poised to be the world’s largest market for personal computers. By 2005, it is estimated that 15% of China’s population would consist of about 200 million middle-income consumers equipped with a high propensity to consume.
This therefore, not only includes providing greater access to financing but the complete financial services solution to the small- and medium-sized enterprises. In addition, monitoring loan performance during the lifetime of the loan rather than only during the approval process will allow for early remedial action to be taken well before difficulties emerge. 4  BIS Review 43/2003  A further important contribution in emerging market economies is to enhance consumer literacy through consumer and investor education to increase the potential for well-informed financial decisions. Another area that is important is the investment in human capital to create a workforce that is skilled and competent, as this will bring substantial long-term benefits. Finally, foreign institutions that have a presence in the region need to recognise the meaningful role that can be realised in the region not only in meeting the requirements of the domestic environment but also to promote investment and business opportunities from their established networks in other parts of the world. The Asian Financial Crisis not only presented the opportunity to improve the region’s resilience to external shocks, but also underscored the importance of breadth in the financial sector, in particular, the development of alternative avenues of financing. Historically, bank loans, as well as funds raised through equity markets have assumed significant roles in Asia as the main sources of financing.