WEF: Experts cite 5 areas of focus for sustained growth
MANILA, Philippines – Can Asia remain as the world's engine of economic growth? How can the region ensure that growth is equally distributed?
In East Asia, regional cooperation underpinned discussions during the session entitled "East Asia Economic Outlook" on Thursday, May 22, Day 2 of the World Economic Forum (WEF) on East Asia 2014. Experts tackled the key priorities in ensuring sustained growth in the region. (READ: WEF on East Asia 2014)
The forum was held against the backdrop of preparations for the establishment of an ASEAN Economic Community in 2015 and ongoing tensions over territorial claims in the South China Sea. (READ: ASEAN microsite on Rappler)
The forum, moderated by CNBC anchor Martin Soong, brought together experts from various fields. They include:
- AirAsia CEO Anthony Fernandes
- Korean Ambassador Lee Il-Houng
- Philippine Finance Secretary Cesar Purisima
- Indonesian Finance Minister Muhamad Chatib Basri
- WEF board member Victor Chu
Here are 5 key areas of focus for sustainable growth as identified during the session:
"We have the money in the region but we need to make our financial markets more efficient, connected and seamless. If not, we will have to keep sending money outside the region," Purisima said.
Infrastructure also serves as a way of ensuring that reforms that are introduced in one administration can be carried over to the next ones.
"What's important is we set the foundations so it can be sustained," Purisima said."The Philippines was number two to Japan in the '60s. It took us 40 years to get to the bottom. It will take us a while to get back up."
2. Political stability
It goes without saying that political stability is needed to attract businesses.
"Once you gain political credibility, you get political support and it's much easier to introduce reforms," said Indonesian Finance Minister Muhamad Chatib Basri.
3. Peace and security - countrywide and regional
Internal peace and security is the number one concern for any investor, said Victor Chu, chairman and chief executive officer of the First Eastern Investment Group and a board member of the WEF.
The impact of regional conflicts, however, must also be taken into consideration, Chu said.
How will the ongoing territorial disputes between East Asian countries in South China Sea affect the economic outlook in East Asia?
Experts said territorial dimensions should just be one of many considerations. "In this inter-connected world, we cannot just be fixated on one aspect because we are interdependent on each other," Purisima said.
4. Growth of middle-income group
For Asia to remain sustainable, there must be a system that would enable the growth of the middle-income group, said South Korean Ambassador Lee Il-Houng.
"The desire to improve economic growth is founded on the desire for improved living standards. There should be a system that reduces income inequaity," Lee said.
5. Better regional connectivity
Fernandes said the potential of the ASEAN Economic Community is massive as "invisble barriers" between trade continue to exist.
But expectations must also be tempered, according to Purisima.
"ASEAN 2015 is not a big bang, it's just going to be an acceleration of the process towards a more integrated market," Purisima said. - Rappler.com