Credible economic policies, economic reforms strategy for ASEAN in dealing future crisis
The Association of Southeast Asia Nations (ASEAN) must implement credible and consistent economic policies to deal with future crises, as well as to pursue economic reforms, a high-ranking official told Xinhua in an exclusive interview recently.
"I think key strategies to deal with future crises are to implement credible and consistent economic policies, as well as to pursue economic reforms that increase resilience to external shocks," said Sundram Pushpanathan, deputy ASEAN secretary-general for ASEAN Economic Community.
He said that given the inherent dynamism of market economies, it is likely that the global economy, including ASEAN, will continue to be challenged by future crises.
"Because of rising globalisation, global economic interdependence will continue to render all economies vulnerable to policy spillover and global business cycle fluctuations," he said.
According to Pushpanathan, one reason why Asia was able to recover from the 1997/98 debacle was because of its commitment to undertake comprehensive financial reforms.
He said that the same reforms have helped the region recover from the global financial crisis more quickly than other regions in the world.
"Of course, reforms without the benefit of good governance are bound to fail. Thus, it is also crucial that all reforms are accompanied by governance reforms to establish confidence that the market needs during crisis time," he said.
For example, he added, financial sector reforms in Asia have been successful because they were being buttressed by measures designed to improve market efficiency and increased transparency in the financial and corporate sectors.
Pushpanathan said that since the recovery began, ASEAN policy makers have very much recognized the importance of having credible and timely exit strategies.
"They are fully aware that that the fiscal stimulus measures being implemented at the height of the global financial crisis are only temporary. And that the path to long-run sustainability of growth should always involve fiscal sustainability as well," he said. In fact, he added, even before the crisis struck in 2008 and since the Asian financial crisis in 1997/98, policy makers in the region have fiscal sustainability as a priority.
"There is always that recognition that economic policies in the region be supported by long-term goals of monetary prudence and fiscal sustainability," he said.
He also said that policy makers are also very much aware of the risks involved of withdrawing the stimulus too early as well as the risks involved in prolonging them.
"Thus, as emphasised in April by the ASEAN finance ministers in their joint statement, and also by the ASEAN Leaders' Statement on Sustained Recovery and Development, it is important for ASEAN to have an orderly exit strategy that is based on the region's economic, financial and market conditions, and will pave the way for a durable growth and stability," he said.
China important to global economic stabilisation: WTO
The Chinese economy's strong economic growth and its demand for imports are important factors in the stabilisation of the global economy, director general of the World Trade Organization (WTO) Pascal Lamy said Thursday.
Lamy made the remarks at the Shanghai World Expo.
He said many economies increased their exports to China during the global slowdown and that the Chinese market has now become crucial for them.
China's economy expanded by 8.7 percent year on year in 2009, helping a number of economies exit recession.
Lamy said China's entry into the WTO not only accelerated the pace of China's opening-up and reform but has also contributed to world economic growth.
He said China is living up to its name -- the country in the center, according to the Chinese meaning -- as it is now playing an important role on the global economic stage.
Lamy said China's admission into the WTO nine years ago was a key event in the history of the world trade body.
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