Asia must build capabilities to adapt to structural changes

23 March, 2021 12:00 AM printer

TOKYO: Asia’s prospects are promising, but the region will need to navigate structural changes brought about by the Covid-19 pandemic in order to achieve its full potential, said Deputy Prime Minister Heng Swee Keat in his keynote address at the Credit Suisse Asian Investment Conference on Monday.

He stressed that South-east Asia must build capabilities to tackle “a greater premium on resilience”, “a big shift to digital” and the global order “going through choppier seas”, report agencies.

Sound fundamentals like favourable demographics and pervasive digital revolution are promising for Asia’s prospects, Mr Heng said at the virtual event. Two-thirds of the global middle class is expected to be in Asia by 2030; South-east Asia alone has 400 million Internet users.

“But Asia’s growth is not fore-ordained,” the minister added.

Noting that the “strategic competition” between the US and China has been accentuated by Covid-19, Mr Heng warned that Asia would need to “navigate the shifting geopolitical tides”. He called on South-east Asia to advance its collective interests and work with any countries interested in partnership.

Asean puts the US’s regional engagement efforts into concrete action, and China is a major trading partner for almost all of Asean, Mr Heng said. “The constructive involvement of both the US and China in the region will be key to Asia’s continued peace, stability and growth.

“It is not a question of choosing sides, but of retaining our ability to make choices for ourselves. This is what Asean centrality is about.”

Mr Heng said that free trade agreements between South-east Asia and other countries, such as the Regional Comprehensive Economic Partnership (RCEP) - “the largest agreement of its kind in history” - have helped to further deepen regional integration and cooperation, but more needs to be done.

Countries that have committed to the RCEP must next expedite ratification, to send a strong signal and attract other countries to cooperate with South-east Asia, he said. Deepened regional integration and cooperation can also grow the cross-border digital economy, Mr Heng added. He raised the example of plans by Singapore and Thailand to pioneer linked national e-payment systems, which will allow users to use mobile phone numbers to send money directly and securely to each other.

The region must also redouble transformation efforts, helping smaller enterprises and their workers along, he said.