5th AEF Analyzes Affect of Economic Crisis in Asia

Contributed information from Dr. Angus Munro

In perhaps one of the most diverse Asia Economic Forums to date, the fifth conference, "Asia's Challenges and Opportunities During the Time of Global Economic and Financial Crises," addressed the very pertinent topic of the global economic downturn.  Taking place in the wake of the G-20 Summit in London, which also sought solutions for action against the crisis worldwide, and preceeding the ASEAN Summit in Pattaya, the conference was appropriately timed, said H.E. Ong Keng Yong, former ASEAN Secretary-

General, who returned to Phnom Penh for his fourth/fifth conference.

Prime Minister Samdech Hun Sen opened the two-day conference at the Raffles Le Royal Hotel in Phnom Penh on April 6 with his keynote address commenting on Asia's rise during the crises and prospects for the future. He noted that because of the now discredited American banking system, there is a desperate need for reform throughout the region. Countries must be smart and innovative to deal with the upcoming challenges. 

He noted the effect of the global financial crisis on Asian countries. Although India and China have sustained economic growth, major trade channels in Asia have seen a sharp decline and there has been a definite imbalance between the rich and poor. He said Cambodia intends to address vulnerabilities and deal with the social impacts of the economic and financial crises, but Asian countries must work together to reform the financial system, insisting on collaboration between the public and private sectors to conquer the crisis, not only economically, but politically.

Several major themes emerged throughout the conference. While many of the forum's participants attributed the crises to moral failure in the West and warned against implementing protectionist strategies when combating the problem, others focused on the effects that the crisis would have on climate change, security and the Millennium Development Goals.  In the first and second plenary sessions, regional ambassadors and economics experts examined key issues affecting Asia and its response to the crises. As the panelists

observed, Asia has links to the West through trade and tourism, and will likely feel the effects of the crisis a bit later. While the tendency could be to implement protectionist strategies, most speakers took a strong stance in avoiding such policies, a conclusion Dr. Surin Pitsuwan, ASEAN Secretary-General, said was also reached at the G-20 Summit.

Ambassador Wang Xuexian of China suggested proactive measures Asia should take to restore financial order. He highlighted steps China has taken to implement stimulus plans and encourage confidence in its people. Despite the likelihood of the region's countries to fall victim to the imbalance of the international market structure, the long-term outlook remains unchallenged. 

"I think Asia might be among the first group of countries to walk out of the crisis," he said, given their rich abundance in resources, political stability and market potential. "Asia countries have become more resilient to risks and have developed relatively sound financial systems."

Others noted that the potential shift of power from the West to the East means that Asian nations must cooperate with one another while recognizing and respecting their individual differences. In doing so, H.E. Jose Almonte, former National Security Adviser for the Philippines warned against a reoccurring crisis. "I have no doubt that globalization will persist, since its benefits outweigh its disadvantages. Participation in the global economy is embedding all the powers and networks of economics, politics and security relationships that serve their mutual interests and offer the

hope of a world without great power wars," he said. He continued, "In my view, whatever measures the G-20 may take to resolve the present global crisis cannot guarantee that similar crises will not happen again, simply because the uncaring character of human nature is unchanging." 

The speakers moved into discussions about the crises impact on MDGs, where UNDP Resident Coordinator Douglas Broderick said Cambodia is on track, but took note that there is still work to be done, a point echoed by the other panelists. The following sessions culminated interesting deliberations on prospects for Asian trade and investment, security issues and climate change. Given the region's extreme weather conditions and socio-economic status, H.E. Ngurah Swajaya pointed out that it will lie most susceptible to the dangers of climate change, and suggested developing countries pay special attention to environmental policies despite the economic downturn.

The conference wrapped up with talk about Asia's political and economic outlook, one that will involve cooperation and a new state of mind. 

The Asia Economic Forum operates as an independent think tank, established by The University of Cambodia as a way to promote policy dialogue on major issues affecting Asia. The next forum is scheduled to take place in January 2010.