Despite a recent OECD report stating that the Japanese economy is in its best shape in the last ten years, many problems are brewing in the face of the reality that Japan’s population is decreasing with an ageing society. With this, it seems that there is an urgent need for more aggressive strategies to secure Japan’s competitiveness against the background of the declining and ageing population.
“Japan’s 21st century vision focuses on proactive reforms instead of reactive reforms,” said Heizo Takenaka, Minister of State for Economic and Fiscal Policy and for Privatization of the Postal Services; Member of the House of Councillors. “Two strategies that will allow Japan to prosper as the central growth area in Asia are maximizing productivity to bring about new value-added and making the most of globalization through free trade agreements (FTAs) and economic partnership agreements (EPAs)”.
“Participating in trade allows you to participate in the entire value chain so that you can fit the part where your country has the highest competitive advantage,” said Lim Hng-Kiang, Minister for Trade and Industry of Singapore, agreeing with Minister Takenaka’s endorsement for globalization. Lim further noted that there is an East Asian movement where societies are transforming from agrarian societies to industrial societies. In this East Asian Development Model, emphasis is given to the export market, mobilizing of national savings, the use of foreign direct investments (FDIs) as well as massive infrastructure. This creates a domino effect where the model unleashes the potential or a relatively cheap but reasonable skilled, educated workforce that, in turn, attracts the intrusion of national and foreign capital.
“The key to Asian success is not just embracing globalization, trade and investment as the key factor in past success but is a sustainable strategy going forward,” said Minister Lim. “Embracing global markets has also instilled discipline. Industries exposed to the winds of global competition have learnt to be nimble and highly efficient.” Minister Lim believes that embracing global markets is a “sustainable strategy”.
Kim Hyun-Chong, Minister of Trade of the Republic of Korea, pointed out that there is only a window of opportunity and what is done in this small window will affect us for the next ten years. He attributes the nation’s recovery from the 1997 financial crisis to massive restructuring. “Promoting further trade, promoting transparency, promoting democratic values… Reforms have to be supported by liberalization,” said Kim Hyun-Chong. He emphasized that countries have to deal with their sensitivities and promote transparency for reforms to be successful, citing the Korean-Chile FTA.
Despite the common viewpoint that China may be developing too quickly, Chen Feng, Chairman, China Hainan Airlines, People’s Republic of China, emphasized that China is developing at a rate that is “not too fast” but “still too slow”. He substantiated his view saying that while most major markets in Asia started development much earlier, China has only recently joined the league. He attributed China’s leap forward to good reform strategies and low labour costs, teamed with a hard-working culture that contributes to the global economy. As he candidly put it, “Taking care of others means that you’ll take care of yourself.”
“The role of governments and regulators should really be to open up and allow a level-playing field and intervene only when they see market failure,” said Michelle Guthrie, Chief Executive Officer, Star Group Limited, Hong Kong SAR; Young Global Leader. “Reform is inevitable, but there is an increasing tendency to try to regulate with a certain outcome in mind.” In Guthrie’s perspective, barriers are not coming down enough.
