Asian countries, including the Philippines, are poised for continued growth, given the “boundless” opportunities in the region, which are being fueled by policy flexibility, high diversity and growing middle classes.
In a forum hosted by the Management Association of the Philippines (MAP) in Pasay on Wednesday, Governor Zeti Akhtar Aziz of the Bank Negara Malaysia – the equivalent of Bangko Sentral ng Pilipinas – said those three factors would allow emerging Asia to largely contribute in reshaping the configuration of the global economy.
“Asia’s growth prospects are underpinned by transformative momentum. The economic flexibility in emerging Asia has enabled most economies in the region to adjust to the changing conditions. Capital and labour mobility are strengthened by economic and financial reforms resulting in a shift to greater market orientation and liberalisation,” Aziz said.
An equally important shift in Asia, she added, has been the re-balancing of economies from being export-oriented to one catering more to local demand.
“Asia is transitioning from being global producers to global consumers. This is a fundamental change taking place in our global economy… Asia is becoming a huge cumulative market in the global market,” Aziz said.
Supporting emerging Asia’s growth is the diversity of the region in terms of size, resources, economic structure, openness and market orientation. She also said that Asian countries must harness each other’s comparative advantages and leverage on regional complementarities, adding that the “whole is greater than the sum of individual economies.”
Also shaping the region’s growth, Aziz said, have been Asia’s demographics.
“Asia is the most populous region of the world – about 60 percent of the world population. It has a vast growing, young middle class population with increasing affluence…. By 2030, the 500 million (population of the) middle class is expected to grow sixfold, to become more than 3 billion. This will have significant implications in consumption, trade patterns, urbanisation, infrastructure development,” Aziz explained.
Over this decade, Asia will require over a trillion dollars in infrastructure projects as every year, 44 million Asians are expected to be added to the population.
Aziz added that while the market might be highly dynamic and uncertain, emerging Asia would continue to contribute in reshaping the configuration of the global economy. The underlying factors driving this growth, she said, would require the Asian countries’ continuous economic and financial transformation to ensure economic flexibility to adjust to the rapidly changing regional and global markets.
Meanwhile, Aziz bucked the idea of having a single currency for Asia, noting that this would be “very costly.” She further noted that Asia would not be able to put in place the preconditions for having a single currency, even over the next 10 years.
“It is not worth our while to pursue that. What we are pursuing are the same objectives that Europe wanted, which is to have greater shared prosperity for the region and we are doing it through greater financial integration and productive investment activities in our region,” she said.