Representatives of regional businesses and academia made a clarion call for political cooperation, trade-and investment-related integration and pro-active fiscal steps to take the Asian economies forward.
As the participants in an international conference on Global Economic Recovery: Asian Perspective held in the city this week, they observed that the Asian economies should show other nations around the globe how to come out of deep recession. In fact, Asia had withered away the shocks of recession on a number of earlier occasions.
Analysts, however, noted that recovery of some of the Asian economies is otherwise continentally driven. Full recovery of some of such economies is dependent on the situation prevailing in the rest of the world, they observed.
The International Chamber of Commerce Bangladesh (ICCB), in partnership with leading chambers and associations, organised the event in the capital. It was attended by policymakers, economists, trade experts, and local and foreign entrepreneurs.
Consumption expansion in China and India, and the relationship between these two countries, the participating academicians noted, will be critical in shaping the Asian agenda in future. Both the countries are advancing rapidly, showing positive signs, in terms of a number of relevant economic indicators. Their growth rate of gross domestic product (GDP) has been maintained at a steady, high level.
The shift of economic power towards China and India in the 21st century is now well-recognised. If both the countries see 'eye to eye', trade and business in the Asian continent are expected to reach new heights. There is no denying that the global power matrix is increasingly revolving around these two large economies -the first and the third largest ones, in terms of purchasing power parity, across the world.
On its part, Asia has been able to strengthen its resilience to global risks. This continent is expected to continue to be a source of global economic dynamism. Gradual fiscal consolidation and supportive monetary policy will certainly help strengthen the continent's greater resilience to risks.
By committing to a new transformative growth paradigm, Asia is now able to lead a process of development towards a future that is sustainable. However, there is now a greater need than before to be aware of the imperatives for tackling the issues concerning growing inequality and environmental degradation and also for taking corrective measures to address such emerging concerns, as the shift of global development paradigm is now taking place in a more pronounced manner.
Formulation of a South Asian Customs Union may, in particular, facilitate trade integration by reducing tariff and non-tariff barriers in South Asia. Such barriers, as have been noted by the participants in the ICCB-sponsored conference in Dhaka, impede trade integration. Attracting more investment from the region is important and then investment will pick up in tandem with the recovery.
The role of South Asia in evolving development paradigm came particularly under close scrutiny in the conference. It was observed that the region should address the key development-related areas like those of infrastructure, urbanisation, land management, private investment and regional and global integration for sustainable development.
As of now, Asia is in need of about US$ 8.0 trillion for infrastructure development. A strong development financing institution is also needed to cater to the needs for facilitating investments in such development areas. However, top priority should be given have to the development of an integrated global strategy for sustaining the projected growth momentum,
A number of economists laid thrust on the need for regulatory reforms and higher infrastructure investments in India, and other parts of Asia. They also called for financial system liberalisation, labour and product market reforms in Japan and tax and spending reforms in many emerging economies.
Such reforms are critically important for not only sustaining Asia's growth leadership over the medium term, but also maintaining investor confidence and securing financial stability in the near term.
Furthermore, the participants in the conference laid emphasis on how the fastest growing continent could continue to lead the global economic recovery and maintain its reform momentum.
As developing Asia constitutes the fastest growing region globally, its reform momentum must be maintained, befitting its potential in order to ensure the region's lead-role in the global economy.
Many see China's growth will open the door for achieving higher growth in Bangladesh and its neighbouring countries including India and Myanmar.
While most Asian economies are in a strong position to withstand any emerging financial market instability, further efforts are needed to mitigate many existing domestic and external imbalances of other countries of the continent.
In the longer-run, Asia's continuing success will depend on the ability to transform the current growth model into that of sustainable development. Across the region, however, economic growth has to become more inclusive, more equitable, and more environmentally sustainable.
Business leaders, attending the conclave, tried to explore the prospect for increased trade and investment, regional cooperation, financial-sector development etc. Many academicians emphasised the need for improvements in governance and better political dispensation for sustainable economic growth.
The need for raising investments in both public and private sectors for infrastructure development was also underscored. Framing investment-friendly policies and regulations was identified as a key element to tap high investment opportunities in the region and other parts of the globe.
Meantime, the fall-outs from the financial crisis and recession in the latter part of the last decade are still slowing down the pace of global economic growth. The average growth rate in the last four years was thus lower than the preceding four-year period.
But the nature and pace of global recovery remain tentative, amid formidable structural impediments, financial uncertainties and inter-regional imbalances that can aggravate the on going problems.
All said and done, Asia is otherwise well-positioned to meet the challenges ahead. All that it has to do at this stage is to undertake the required reforms at a faster pace than before.
(szkhan@dhaka.net)
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