Inflation will be the biggest risk for Asia in the future, Rajat M. Nag, Managing Director-General of Asian Development Bank (ADB), said in Kuala Lumpur on Sunday.

Since the people of Asia couldn't accept the rising prices, the measure of reducing subsidy taken by government is right, he said at the 17th World Economic Forum on East Asian (WEF on East Asia) which opened on Sunday.

"Generally speaking, Asia can provide enough food for its people, but the challenge of the government is that people can afford it," he said.

The subsidy policy of the government need to be aimed at controlling inflation and ensure the lives of the poor people, Nag said, adding that the government need to provide subsidy for medicine and education for its people.

Besides, Asia faces the problem of inequality, he said.

The income gap is widening because the rich are getting richer faster than the poor are getting richer, he said.

"That is a major risk which can sow the seeds of social dissent and discord," Nag said.

"I think Asia has been a tremendous success story in fighting poverty. In 1990, one in three Asians subsisted on two dollars a day. In 2000, that became one in five," he said.

Nag estimated that Asia needs 300 billion U.S. dollars a year of investments in infrastructure over the next 10 years.

This huge demand present tremendous opportunity for governments in the region and the private sector to collaborate, he said.

(Xinhua News Agency June 16, 2008)