Liberalization and Integration: Southeast Asia’s Economic Prospects


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In partnership with The Heritage Foundation

When: Nov 18 2014 - 10:00am until Nov 18 2014 - 11:30am
Where: The Heritage Foundation’s Lehrman Auditorium 214 Massachusetts Avenue, NE Washington, DC.

An Asia Pacific Political Economy and Trade Seminar featuring:

Dr. Peter Petri
Carl J. Shapiro Professor of International Finance
Brandeis University

John Goyer
Senior Director, Southeast Asia,
U.S. Chamber of Commerce

Dr. William T. Wilson
Senior Research Fellow, Asian Studies Center,
The Heritage Foundation

Co-hosted by:

Dr. Satu Limaye 
East-West Center in Washington

Walter Lohman 
Director, Asian Studies Center, 
The Heritage Foundation

Left to right: Walter Lohman, Dr. William Wilson, John Goyer and Dr. Peter Petri

During a joint seminar between the Heritage Foundation and the East-West Center in Washington, a panel of experts on ASEAN laid out their observations regarding the region's future following the recently concluded APEC meeting. Dr. Peter Petri outlined the findings of his recent publication with Michael Plummer in Policy Studies entitled ASEAN Centrality and the ASEAN-US Economic Relationship. Given the more favorable environment surrounding TPP negotiations following the APEC meetings, particularly the movement forward on the ITA agreement, Dr. Petri emphasized the need to paint a clearer picture to ASEAN about how it will benefit from the TPP. Specifically, the United States and other regional powers need to articulate what the next steps will be should the TPP go through and how that would benefit ASEAN countries that are not yet a part of the negotiations. He then took it a step further and advocated for regional powers in Asia to get a "jump" on discussing the long -term goal of an FTAAP, which would encompass the whole Asia-Pacific region under one large free trade agreement. Dr. Petri ended his remarks by cautioning the United States to not overemphasize money or security when it comes to cementing its friendships with ASEAN nations and instead look for ways to expand its soft power. Ultimately the way to ASEAN's heart is to give it the respect it deserves in its own right rather than making it feel like " a tool between contests of great powers."  

Paraphrasing the recently-released US Chamber of Commerce 2015 ASEAN Business Outlook Survey, John Goyer drew attention to the largely positive feedback US companies gave when questioned about ASEAN's economic future and what it means for them. The majority of the business executives surveyed expected ASEAN would continue to represent an important source of global revenue, thereby presenting a significant opportunity for investment. Myanmar, which was not a focal point of last year's survey, captured a lot of attention from executives for investment among other projects. There was even a growing movement of diversifying from investments in China in favor of ASEAN given lower costs and still growing markets. However, Mr. Goyer pointed out that skepticism still remains, particularly surrounding how ASEAN countries deal with corruption and having personnel that are properly trained. 

Dr. William Wilson echoed similar themes in his description of the threat the middle income trap poses to ASEAN countries and Asia at large in an overview of his report Beating the Middle-Income Trap in Southeast Asia. Based on his observations, despite the its outward appearance Asia has endemic problems economically. To back up this argument, Dr. Wilson described three main factors contributing to what he saw as Asia's growth plateauing: a large credit-run-up, changing demographics, and China's slowing growth. Using China as a example for how much debt, and corporate debt in particular, has gotten out of hand in Asia, Dr. Wilson told the audience that currently China's $14.2 trillion corporate became higher than that of the United States last year. In many Asian countries bank credit has climbed to over 100% of GDP, higher even than what it was during the 1997 Asian Financial Crisis. Demographically, numerous Asian countries, most seriously Japan and South Korea, are experiencing decreasing fertility rates coupled with higher dependency ratios. In short, less working- age people have to care for more (the very old and the very young) people who cannot work or take care of themselves by other means. Finally, given that China is the largest trading partner of many Asian countries and the second largest importer of goods in the world, a slowdown in its demand could gravely hurt Asian countries who depend on exports as a main source of revenue. China itself is being hurt by similar downgrades in demand from the United States and Europe; last year its productivity growth became negative for the first time since the Cultural Revolution. To combat this, Dr. Wilson advised Asian countries to "move from importing and imitating [Western products] to innovating," thereby increasing their productivity growth to help maintain positive, consistent growth rates.   

To view the webcast of this event, please click here

 For more images, please visit the album for this event on the East-West Center's Flickr page. 


Primary Contact Info:
Name: Sarah Batiuk
Phone: 202-327-9755