ID :
213124
Fri, 10/28/2011 - 05:48
Auther :
Shortlink :
https://oananews.org//node/213124
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ASIAN FINANCE SECTOR HAS EXCELLENT PROSPECTS: THINK TANK
KUALA LUMPUR (Bernama) - The Asian financial sector has excellent prospects due to favourable demographics, high savings, propelling growth and access to technology and capital.
Andrew Sheng, Fung Global Institute president and a board member of
Malaysian government's investment arm Khazanah Nasional Bhd, said the current financial crisis has triggered a fundamental review of the international financial order and architecture.
Post crisis, advanced countries would see slower growth while emerging markets, especially Asian, are expected to grow strongly, he said at the inaugural CIMB Asean Conference 2011 here on Thursday.
The Asian Development Bank (ADB) has projected an 'Asian Century' scenario where Asia's share of global GDP could double by 51 per cent by 2050, returning the world economic order to what it was before the Industrial Revolution some 250 years ago.
By 2050, estimates are that Asia will have half of global financial assets with major financial centres located in Asia.
"By then, at least three Asian currencies will be global, the Yen, RMB and Rupee. These would have a major impact on Asian economies and businesses. Asia will be partners in global price making and rule-making," he added.
Sheng said this prospect has raised the issue of whether Asia can 'go it alone' by 'decoupling'.
"In the short term it is not possible but it can be done in the long term provided we integrate and develop our internal capacity," he said.
The prospect for decoupling depends on several important factors such as generating domestic engines of consumption and growth, creating own thought leadership, upgrading regional governance and institutionalisation as well as further economic and financial integration.
"Asian economies also must find what is the right balance between state and market. The Western model of "the market is always right" has failed in the present financial and fiscal crisis. The Asian model of heavy state intervention has cushioned Asia from the worst market shocks, but overplanning, overregulation and crowding out can also hurt growth," he said.
Asean as a group is an important lever amongst giants such as China and India but much of this would depend on quality of governance, he said.
Sheng said at the moment, there is interconnectivity at government level in Asean but at the business to business (B to B) and consumer/civil society level it has not gained momentum.
"If Asean wants to grow, B to B is the right way to go. Because if Asean doesn’t grow at the same speed as the rest, we will face marginalisation," he said.
Andrew Sheng, Fung Global Institute president and a board member of
Malaysian government's investment arm Khazanah Nasional Bhd, said the current financial crisis has triggered a fundamental review of the international financial order and architecture.
Post crisis, advanced countries would see slower growth while emerging markets, especially Asian, are expected to grow strongly, he said at the inaugural CIMB Asean Conference 2011 here on Thursday.
The Asian Development Bank (ADB) has projected an 'Asian Century' scenario where Asia's share of global GDP could double by 51 per cent by 2050, returning the world economic order to what it was before the Industrial Revolution some 250 years ago.
By 2050, estimates are that Asia will have half of global financial assets with major financial centres located in Asia.
"By then, at least three Asian currencies will be global, the Yen, RMB and Rupee. These would have a major impact on Asian economies and businesses. Asia will be partners in global price making and rule-making," he added.
Sheng said this prospect has raised the issue of whether Asia can 'go it alone' by 'decoupling'.
"In the short term it is not possible but it can be done in the long term provided we integrate and develop our internal capacity," he said.
The prospect for decoupling depends on several important factors such as generating domestic engines of consumption and growth, creating own thought leadership, upgrading regional governance and institutionalisation as well as further economic and financial integration.
"Asian economies also must find what is the right balance between state and market. The Western model of "the market is always right" has failed in the present financial and fiscal crisis. The Asian model of heavy state intervention has cushioned Asia from the worst market shocks, but overplanning, overregulation and crowding out can also hurt growth," he said.
Asean as a group is an important lever amongst giants such as China and India but much of this would depend on quality of governance, he said.
Sheng said at the moment, there is interconnectivity at government level in Asean but at the business to business (B to B) and consumer/civil society level it has not gained momentum.
"If Asean wants to grow, B to B is the right way to go. Because if Asean doesn’t grow at the same speed as the rest, we will face marginalisation," he said.
