Wednesday, June 23 2021 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
OF CHANGE - AND FEAR OF THE FUTURE
ASIA is about to embrace a series of painful reforms which will bring uncertainty and change. Asia’s world has changed . . .
ASIA IS FACING what can only be described as unprecedented challenges in coming months and years — an array of problems, some of which are intractable and potentially explosive.
It is no longer simply a straightforward case of needing to grow their economies. They must, of course, continue to do so. But the task will be made so much more difficult as they, themselves, run into domestic constraints.
For Asia, growth has traditionally come from exports. So as long as the global economy was doing well, Asia did well. But that era has now come and gone.
While world trade will invariably continue to grow at its own pace, as dictated by global demand, but no longer in double-digit numbers, maintaining Asia’s share of the global pie is not a given. It will be incumbent on all countries to work that much harder for the extra trade dollar.
The global investment dollar that used to fuel development from China to Indonesia and Singapore has also become scarcer — and the competition for it has become just that much tougher.
It is time for some Asian countries to look at their own domestic roadblocks, ranging from poor infrastructure to cumbersome rules and the diseases of success – including corruption and the merciless proliferation of Internet chatter and social media, leading to more questioning electorates.
The magic word today is productivity. The onus is upon all governments to improve productivity, and in Asia, as in many cases, the era of cheap and abundant labour is long gone.
It will be a hard slog, requiring fierce determination to develop policies which will foster and develop a better skilled work force.
There will need to be more innovation, which can only come from higher spending on research and development and better education — in an increasingly-competitive world for intellectual property.
Governments also need to address the scourge of widening inequality, a growing threat to social stability. And institutions that support the economy must be improved — by reducing red tape and corruption.
For many countries, a glaring problem lies in long-standing bottlenecks in infrastructure. Reforms must pave the way to get more projects up-and-running — and that means reorganising their budget priorities to help pay for new roads, railways and airports.
It takes a strong leader to be able to get some of the trickiest jobs done, like cutting back on subsidies for the poor and historical privileges for the wealthy — and increasing taxes for the new wealthy and for companies.
China’s Xi Jinping is emerging as a strong leader with a clear vision of where he wants to take his country. Japan finally has a stable government, led by second-term leader Shinzo Abe, with his equally strong agenda to change Japan.
India has Narendra Modi, who comes with strong credentials. Indonesia has elected Joko Widodo from outside the traditional political elite to lead his country.
Both Modi and Jokowi are reform-minded politicians, but whether they can carry out what they want to do on a national level, only coming months and years will tell.
Regardless, Asia is about to embrace a series of painful reforms which will bring uncertainty and change. Some changes will be welcomed, others may not.
Overlaying these unknowns are rising geopolitical tensions throughout the world, including Asia.
Some, like Ooi Kee Beng, Deputy Executive Director of the Institute of South East Asian Studies (ISEAS), part of the University of Singapore, say the security situation in Southeast Asia was actually worse in the 1960s and 1970s.
Ooi says those times saw confrontation — when Indonesia was at loggerheads with Singapore, leading to a tragic bombing incident in the-then newly-independent City-State.
It was precisely to foster stability in the region that the Association of Southeast Asian Nations (ASEAN) was formed. But Ooi admits there are, today, internal issues within ASEAN — which is itself a weak region surrounded by big powers.
And, undeniably, there are political, cultural and religious schisms even within ASEAN — Buddhists, Catholics and Muslims. Politically, Thailand is now clearly a divided country, and it is hard to see how it can heal quickly after traumatic years of political instability.
The last general election in Malaysia also showed a politically-divided nation, with more than half of the popular vote going to the Opposition in a blow to the ruling Coalition, led by the United Malays National
Long-standing racial harmony seems
unsettled in Malaysia — witness a young Malaysian Chinese couple making plans to have their first baby delivered in Australia (to gain citizenship).
Such is the parents’ faith in their future in a Malaysia where politics is increasingly driven by race. The story — fear of the future — is no different for tens of thousands of wealthy Asians, mainly Chinese, who are buying assets and citizenships in Australia and elsewhere in the West.
So cast your eyes around Asia today. Whether it is the structure of the economy, political tensions or geopolitical issues, Asia has become a less secure place for many — just ask those making plans to leave.
* Florence Chong is Editor of ATI Magazine.