6th Asia Economic Forum

Examining Asia’s Opportunities and Challenges

Hundreds of delegates gathered for the 6th Asia Economic Forum (AEF), “Maximizing Asia’s Strategic Roles in the World: Opportunities,
Challenges, and Future Prospects,” at the Raffles Le Royal Hotel in Phnom Penh on January 20-21, 2010. With an impressive list of distinguished speakers, the two-day forum explored Asia’s strategic role in the global market and addressed economic, political, social, and environmental issues affecting national
and regional development as countries continue to recover from one of the worst global recessions in recent times.

Samdech Techo Prime Minister Hun Sen opened the event with a keynote address that applauded the achievements made over the past few years, notably the strengthening of an ASEAN community, and presented several tasks for the ASEAN community to work jointly on to strengthen the region’s competitiveness. To bolster national economic integration and development, he recommended that the region expand the infrastructures of finance, trade, investment, agriculture, tourism, and transportation within each nation to minimize the cost of production and stimulate consumption. This has larger implications for the region as well, since Asia stands to emerge as an increasingly influential region in the global economy in the upcoming years.

In examining Asia’s year in review, H.E. Dr. Kao Kim Hourn, UC President and Secretary of State for the Ministry of Foreign Affairs and International Cooperation, noted the significance of the Charter for ASEAN and stressed the need for countries to move forward in implementing the Charter so that ASEAN can take a leadership role in the region and worldwide.

“ASEAN has evolved from being an association to being a community with an identity, which belongs to the people rather than just the governments,” stated Dr. Kao. He continued, “It needs to be people-centered with a single market in order to attract investment.” Promoting the progress of the economy
and trade in Asia was the first of several major themes that emerged throughout the seven plenary sessions and also mirrored the

tasks Samdech Techo Prime Minister Hun Sen outlined in his opening address. H.E. Ambassador Ong Keng Yong, former Secretary-General of ASEAN, made several recommendations on this issue, ranging from encouraging ASEAN countries to commit to capital market liberalization (a relaxation of government restrictions) to increasing domestic demand and consumption. Countries should change their investment and financial rules and regulations to accommodate foreign companies and investors since they can bring significant growth and benefits to ASEAN countries, he argued. Furthermore, Cambodia has a capacity and ability gap in addition to its development gap, so Cambodia and other similar countries need to “mobilize their abundant human resources.”

Opportunities for economic recovery for ASEAN include strengthening relationships with the United States, European Union, and two rapid growth countries in Asia, China and India. Dr. Phan Phalla, Deputy Secretary-General of the Supreme National Economic Council, suggested that nations diversify their economies, export markets and domestic demand, and create outward policies to enhance regional purchasing power and demand, while Mr. Douglas Clayton
(Managing Partner at Leopard Capital) highlighted private sector capital as a useful source of development capital and noted that the region offers attractive investment opportunities because the economies are open to entice investors who can come in early with little competition.

Expanding on the theme of economic progress, but also touching upon another major theme of poverty alleviation, H.E. Ambassador Wang Xuexian offered three promising recommendations to increase the region’s competitiveness and sustain development: 1) restructure the economic system so the focus includes wealth distribution within a nation instead of merely overall economic growth, 2) reform the income distribution system between trading nations so

Asian countries retain a greater share of the profits from their exports than developed nations, and 3) develop tertiary (service) industries aimed at improving productivity and performance.

In the session on poverty and the development gap, H.E. Son Koun Thor (Advisor to Samdech Techo Prime Minister Hun Sen and Chairman and CEO of Rural Development Bank) discussed public investment programs focused on social service development and microfinance services and small and medium enterprises (SMEs) in rural areas, two mechanisms the Royal Government of Cambodia (RGC) has introduced to alleviate poverty in the nation. Mr. Douglas Broderick, United Nations Resident Coordinator, continued with a review of the Millennium Development Goals and offered several tangible recommendations to reduce the inequality gap and the consequent social problems resulting from poverty.

First, countries should improve gender equity so women have improved educational and economic opportunities, and - equally as important - are protected from violence and exploitation. Second, countries should implement programs that are proactive rather than reactive, so that the system aims to reduce poverty instead of merely treating problems of poverty. Next, countries need to improve health services and access to health services. And lastly, countries need to improve governance by fighting corruption and respecting human rights.

Other speakers addressed critical issues related to poverty, including economic inequity, food security, energy security, and communicable diseases. The ASEAN community must continue to cooperate on these issues and integrate frameworks to manage these challenges. Some solutions presented included enriched education and training programs, as well as social programs focused on job creation and income-generating opportunities.

The next major theme in the conference centered on peace and security. Prime Minister Samdech Techo Hun Sen identified regional peace, political stability, and security as necessary elements for ASEAN to sustain its development, and Ambassador Wang Xuexian agreed, saying, “There is a need for political harmony between nations, with economic cooperation in order to achieve a win-win situation.” To build a harmonious Asia, he advocates respect between nations, both politically and culturally, and believes that mutual trust will help settle conflicts peacefully through negotiations.

Other suggestions to promote peace and security included implementing peace studies to facilitate conflict resolution, and encouraging public participation in politics and organizations so as to better serve the interests of the people.

A world-wide concern, minimizing the threat of climate change, was another major theme and the primary focus of the fourth plenary session. Earlier in the AEF, Dr. Kao stated that all countries are affected by climate change, with developing nations being the most vulnerable because of limited resources to mitigate the effects and implement adaptive measures. Speakers addressed this concern throughout the conference, proposing that countries coordinate efforts to collectively handle climate change issues and stressing the importance of a cohesive ASEAN to represent the region in related global dialogue. Working as an ASEAN community
can help to strengthen the voice and leadership of the region and ensure that the interests of this region are taken into consideration in global discussions and policy development, echoing a point raised earlier in Samdech Techo Prime Minister Hun Sen’s opening speech.

During the plenary session, Mr. Lay Kim, Team Leader at the United Nations Development Program, highlighted how climate change is not solely an environmental
issue, but also a development issue for countries because of its imminent threat to public health, agriculture, water resources, coastal systems, and other ecosystems. In addition to the common suggestions of practicing energy efficiency and developing renewable energy, several multidimensional recommendations were proposed on how governments, institutions, businesses, and citizens can respond to challenges of climate change. These include cooperating on conservation efforts to protect ecosystems, improving scientific knowledge, building more resilient infrastructures, developing effective policies and programs, coordinating national and international efforts, and creating a knowledgeable citizenry engaged in addressing climate change. For Southeast Asia, the highest mitigation potential to reduce greenhouse gas emissions comes from agricultural processes and practices, according to Mr. Teak Seng (Country Director of World Wildlife Fund), who also believes that crop land management can contribute to reduced carbon emissions and concurrently ensure food security in the region.

Perhaps one of the most important themes of the conference, and one that is inextricably linked to the success of every other theme, is that of human resources development.

Developing the skills set, knowledge base, and capacity of people must be a priority for each nation and the collective ASEAN community, for without this critical component, nations will be unable to institutionalize economic and social development, further hindering their ability to develop and compete in the global market.

“People are some of the most important elements of an organization, a business, a society, and a country. For any nation to prosper it must look after, care for, nourish, and educate people,” Lord George Carey said while commenting on Asia’s demand for human resources. “It is not only good ethics, but it is also good business as well.” He continued by advocating for better education and training programs, greater investments in youth employment and training opportunities,
and greater attention to caring for the vulnerable, such as the poor and the sick. He also warned policy makers in developing Asian countries about the impending
dangers of exploiting their comparative advantage of cheap, unskilled labor. In particular, he cited low productivity, a lack of skill-based employment opportunities, and an inability to compete in a highly competitive global market as reasons to not utilize this strategy.

Reaffirming how development of human resources can help maximize opportunities for Asia, Mr. Michael Vatikiotis (Asian Regional Director of the Center for Humanitarian Dialogue) stated that countries are not yet realizing the full potential of their people

and the value-added they can bring to development efforts. He proposed building strong institutions and developing people’s talents and expertise to strengthen the region’s resilience and ability to progress. Interestingly, he referred to “the culture of power” as a hindrance to developing human capacity within a nation; if delegating authority and responsibility were better institutionalized in ASEAN countries, more people can cultivate their knowledge and skills and more learning experiences will be shared, stimulating growth and development.

After emphasizing education as a core value of a successful society, using Japan as an example, and encouraging entrepreneurs to minimize business risks by making well-informed decisions, Dr. Haruhisa Handa (Advisor to the Prime Minister of the Kingdom of Cambodia, Founder and Chairman of AEF, and Chancellor of UC) closed the conference with wise words to inspire the participants: “Great leaders give more than they receive.”

The AEF was established by UC to promote policy dialogue on economic, social, and political issues affecting Asia, and it serves as a platform to create synergies between developing nations and more developed countries. The sixth annual AEF was made possible through the generous support of its sponsors (the Worldwide Support for Development and the International Foundation for Arts and Culture), its media sponsor (The Southeast Asia Weekly), and its organizers (University of Cambodia, Asia Economic Forum, and the Asia Leadership Center).