However, Myanmar and other flashpoints in the region, such as the denuclearisation of North Korea and the cross-straits relations between Taiwan and Beijing are unlikely to derail Asia's growth.

Making this assessment at the Barclays Asian Forum on Thursday, Mr Goh said that instability in Myanmar can affect its neighbours and hurt the Association of South-east Asian Nations (Asean)'s reputation.

'National reconciliation and an agreement on phased changes and power sharing is the only way to prevent another widespread protest, which may end up in a bloody uprising to bring about change,' he said.

Owing to the psyche of distrust of the junta, the complex national make-up of the many diverse ethnic groups and the fighting with insurgents, he said bringing the different parties to dialogue and compromise will not be 'quick and easy', adding that the United Nations Special envoy Ibrahim Gambari must be given some time to start the process and make progress.

But he said Asia's growth is likely to continue despite issues like this boggling the region.

In 1980, Asia accounted for just 19 per cent of global GDP, at 36 per cent at present, the amount is almost doubled. Come 2020, that figure is expected to hit 45 per cent, Mr Goh said.

In terms of High Net Worth Individuals, 23 per cent of global wealth is currently held by such individuals in Asia-Pacific, he said, with Merrill Lynch forecasting the region's annual growth rate in private wealth to be 8.5 per cent, and reaching US$12.7 trillion (S$18.4 trillion) by 2011.

However, Mr Goh cautioned that riding on the region's growth, the sub-prime crisis has shown that vigilance in the financial industry is still needed and that lessons can be learnt from the crisis.

Asia should develop their capital markets to complement the banking system and improve the robustness and efficiency of its financial system, he said.

There is also a need to monitor off-balance sheet exposures and to institute better management and supervision of liquidity risks, and to set up crisis management and resolution frameworks to minimise systemic fallout should financial institutions run into trouble, he said.

On the challenges to sustained growth Asia faces, Mr Goh said global financial imbalances pose political and economic risks. 'Large capital inflows into Asia have resulted in excessive growth in money and credit in several countries, thus creating inflationary pressures and asset bubbles in the stock and housing markets. At the same time, there are concerns that Asia's large trade surpluses are based on undervalued exchange rates which have given Asia an unfair competitive advantage,' he said. This may result in protectionist responses from the US and the EU.

With more countries in Asia and the oil-rich countries establishing sovereign wealth funds to invest their excess reserves, the US and Europe may also react nationalistically over the prospect of losing their strategic assets to foreign sovereign investors.

'Asia therefore needs to work with G7 countries and multilateral institutions to address these policy and political challenges posed by global financial imbalances and sovereign wealth funds,' Mr Goh said.

With Asia's rising affluence, there is also the problem of a widening income gap which may erode social unity and political stability.

Environmental degradation is another challenge and Asia will have to find ways to grow rapidly and sustainably, he said.

Touching on the Asean Summit, which will be held in Singapore, Mr Goh said the politically-binding declaration which Asean countries will sign to establish an Asean Economic Community by 2015 will help it to 'evolve into a single market and production base with free flow of goods, services, investment and skilled labour'.

'Asean, with its half a billion people and a combined GDP of more than US$1 trillion, will then be a competitive investment proposition.'

He said Asean leaders will also sign the landmark Asean Charter which will transform Asean into a more cohesive, effective and rules-based organisation.