Asia 'lynchpin of growth' for world economy

business July 09, 2012 00:00


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As America and Europe continue clawing their way through long drawn-out and persistent economic doldrums, Asia is looked upon as a "cheerful" lynchpin for economic recovery and long-term sustainability.

Numerous leading global thought-leaders at the first annual “Asia in Transformation “ Forum sponsored by Chulalongkorn University’s Sasin Graduate Institute of Business said everyone should embrace and optimise the opportunity.

“In the past, our markets were local and national but today they are regional and global,” said Toemsakdi Krishnamra, Sasin’s director, at the Plaza Athenee Hotel’s Grand Hall.

Although the current prolonged economic doldrums in Europe and the US have re-emphasised Asia’s importance, many speakers at the two-day event, that began yesterday, reiterated that economic power had already been shifting from the West to the East during the past three decades.

“China and India not only withstood the global economic crisis that began in 2008, but have actually continued growing,” said Pongsak Hoon-trakul in his introductory address.

He also said that the 10-member Asean would continue rising to global prominence as it forms a common market by 2015.

“Asia is being remade and thrust into international focus by historic, political, economic and technological trends,” he said.

The opening plenary session entitled “Asia on the Rise: be cheerful or be fearful” featured comments and presentations that were on the whole very positive about Asia’s future.

Deborah Lucas, from MIT’s Sloan School of Management, said that she was “cheerful” about Asia’s future development primarily because of its remarkable growth during the past several decades.

She said that Asia’s development should not be seen as a zero-sum game because both the developed regions and the developing regions can optimally benefit through cooperation.

“Tackling issues such as climate change, ageing populations and more balanced global development can only be optimised if everyone works together,” she said.

Lian Ping, Bank of Communica-tion’s chief economist, who is based in Shanghai, also emphasised that greater regional cooperation was a major reason why Asia was able to immunise itself from the recent sub-prime induced global crisis.

However, he added that key challenges such as further developing the region’s innovative capabilities were critical for continuing success in the next decade.

“Asia will not drive global economic growth on its own because its innovative structures are still not dynamic enough to lead sustainable global growth,” he said.

Ultimately, Lian said that he expects greater intra-Asian cooperation, including many China-led initiatives that will continue making Asia’s transformation cheerful.

President and CEO of Teijin Ltd, Japan, Shigeo Ohyagi, said that his company, which has extensive Thai operations, was very optimistic about Asia’s continuing economic development. However, he was also fearful of external elements that may affect continuing unimpeded growth.

These included the current European debt crisis that he said has already dampened trade, political Middle East instability and rising productivity costs in Asia.


“We must continue upgrading our industrial infrastructure and business models, improving knowledge and skills and educational quality,” Ohyagi said.

Olarn Chaipravat, president of the Thai Trade Representative’s office attached to the Prime Minister’s Office, said that during the next two decades many Asian countries would face similar policy constraints.

“Ageing populations in Japan, China and even Thailand require specific policy and strategies,” he said.

In Thailand, policy-makers must be aware that the days of cheap labour that sustained our economic growth for the past six decades are over. “We must develop new strategies going forward,” he said.

A significant portion of Thailand’s lower-priced labour is from neighbouring countries. “A more logical strategy going forward would be aligning our future labour policies to our neighbours’ economic development.”

Yesterday’s event also included plenary session topics such as “Connecting Indochina for sustainable prosperity” and “Corporate Asia: innovation and new growth models”.

Important breakout sessions included “Natural disasters in Asia and the Global Supply Chain” and risk management during the March 2011 Fukishima Earquake.

Today, the Forum continues with plenary sessions on “Financial crises and the future of global and Asian banking” and “Fast track knowledge building: breaking out of the middle-income trap”.