June 13, 2014 9:02 pm JST

'ASEANOMICS': How will the region look in 2020?

Ken Moriyasu, Nikkei staff writer

A panel of businessmen and policymakers discussed the future shape of Asean at the Nikkei Asian Review Forum on Friday.

Singapore -- A panel of businesspeople and policymakers discussed the future shape of Asean in a panel at the Nikkei Asian Review Forum on Friday, with each suggesting ways to maximize cooperation toward a new 'ASEANOMICS'.

      "The emerging superpower in Asia is Chin-dia," said Boonchai Chokwatana, Chairman of Thailand's Saha Pathanapibul, pointing to China and India. Noting that Chin-dia represents 37% of the world's population, Boonchai said, "Asean is in the middle of Chin-dia and should benefit the most."

     Boonchai pointed out that the merging of Australia and New Zealand, rich in resources, into Asia would add a new dynamic and benefit the region further. "Prosperity in Asia will be a megalong trend, not just over a short term," he said.

     Izumi Kobayashi, the former CEO of the Multilateral Investment Guarantee Agency, said that economic integration and free trade could pose a risk for some Asean members in terms of their ability to retain skilled workers. "If a skilled worker was not satisfied he or she could easily look for higher paying opportunities in other countries. Some could be left with only unskilled workers."

     On the bright side, Kobayashi said Asean's diversity would be an asset to Japan if used as a gateway to the world. "Asean is a mixture of cultures, and Japan would be wise to use Asean's network in Bangladesh, Pakistan or the east coast of Africa to reach markets." 

     Atsushi Nakajima, chairman of Japan's Research Institute of Economy, Trade and Industry, a governmental policy think-tank, told the audience that Japan's growth could decline by 1 percentage point per year after 2020 due to its declining population, and that one way to maintain growth is globalization. "We are producing parts of a product in one country, assembling in another, and selling it in a third country. Therefore, we need a megafree trade agreement, not a bilateral FTA," he said

     David Fernandez, managing director and head of fixed income, currencies and commodities research, Asia Pacific at Barclays Bank, shared his analysis of the Asean economies, saying that while China had serious risks in the property market, the Indian economy was doing better than most expected.

     He said that Malaysia was the only Asean country expected to do better in 2014 than 2013, and could see monetary tightening rather than easing. The Philippines' economic growth is remarkable and "China-like" this year, he said.