VINACHEM

TOKYO — Asian nations must strengthen multi-tiered collaboration to promote free trade to achieve further economic development, without succumbing to protectionism, Tsuneo Kita, president and CEO of the Nikkei Inc, has said.

At the opening of the 16th International Conference on the Future of Asia on Wednesday, Kita said although the global economy had emerged from the recession that followed the Lehman shock of 2008, stable growth had not been secured.

Speaking at the conference, Viet Nam's Deputy Prime Minister Nguyen Thien Nhan told participants that co-operation within the Association of Southeast Asian Nations (ASEAN) was essential for Asia's continued growth.

Nhan called for concerted action, saying actions that had been taken by ASEAN on interest rates and foreign exchange markets to pull through the crisis could, although work in the short run, eventually lead to conflicts.

He told participants that this year's conference took place in the midst of a better-than-expected economic recovery in most regions across the globe.

Recent economic data revealed optimistic prospects for the global economic recovery. The updated IMF world economic outlook for April raised its growth forecast to 4.25 per cent compared to a previous figure of 3.9 per cent in January, and the organisation had retained its prediction of 4.3 per cent growth for 2011.

However the recovery was clearly uneven and unsustainable as the world economy was confronting elusive challenges like the never-before-seen public debt ratio, budget deficits, high inflation and unemployment.

Asia had taken the lead in the recovery, with the Asian Development Bank (ADB) April report heralding the news. East Asia was set to continue with its rapid and impressive V-shaped recovery. Within ASEAN + 3, GDP growth was expected to reach 4.6 per cent this year against 0.9 per cent last year.

ASEAN also planned to adjust GDP projected growth from 4.9 per cent to 5.6 per cent this year. For ASEAN countries, business incentives and facilitation have helped the region lessen the impact of outside shocks.

East Asian economies were Viet Nam's major partners in terms of trade and investment. Trade with East Asian economies made up 53 per cent of Viet Nam's total trade revenue. East Asia was also a major resource of FDI. By the end of November last year, East Asian FDI inflows to Viet Nam amounted to US$88 billion with $26 billion in implemented capital, accounting for 53 per cent of registered and 47 per cent of disbursed capital, said Nhan.

ADB President Haruhiko Kuroda told participants that the economic outlook was quite positive. The ADB's latest forecast showed that Asia's GDP would grow 7.5 per cent this year well above the 5.2 per cent growth rate in 2009.

East Asia was leading the recovery, with expected GDP growth of 8.3 per cent this year. Chinese growth of 9.6 per cent would continue to drive the region, while South Korea should rebound to 5.2 per cent.

ASEAN aggregate growth was forecast to rebound to 5.1 per cent in 2010, based in a large part on the recovery in global trade and investment. Brunei Darussalam, Cambodia, Malaysia, Singapore, and Thailand would return to growth in 2010.

There were several risks to this outlook. The recovery in G3 economies (the US, Japan, and the EU) could be slow. While its impact on Asia had been limited, the European sovereign debt crisis could derail the fragile recovery there. China could find it difficult to control an overheated economy.

Haruhiko said at a regional level, better policy co-ordination on exchange rates would help macro-economic management and lessen the probability of losing export competitiveness between neighbours.

This annual conference, held by Nikkei, was kiched off yesterday in Tokyo and served as a prestigious forum in the region, attracting senior government officials and politicians of many Asian countries and major economic groups in the world.

(Source: VNS, by Viet Thang)