Dr Gordian Gaeta 7th Asia Economic Forum: The Asian Century in the Making: Achievements, Challenges and Future Trends Session V: Sustaining Asia’s Economic Recovery

Dr Gordian Gaeta 2  (East Asian) Miracle: Superior accumulation and allocation of physical and human capital – market friendly economic policies with economic contests  Economic Advancement (Recovery): Asia’s declining opportunities/resilience in pursuing this path  The Way Forward/Future trends: Private investment and capital markets reshape economies and the next growth curve – policy and government support is ambivalent at times AGENDA

Dr Gordian Gaeta 3  Strategy: Prevailing capital import – goods export (FDI/resources - low cost labor/infrastructure) success well documented but with growing issues  Opposing Forces: Dutch disease (FX), fickle capital flows, global economic health (consumption), local asset sell out, bandit economy and trade conflicts  Policies: (free) market regulations, company and credit environment, liberal people and trade policies CHALLENGES

Dr Gordian Gaeta 4  Domestic Value Growth: growth based on skills, competence and productivity, rule of law and an institutional framework  Policies: open market and trade regulations, people, people, people, company and credit development, building institutions  Need to oppose short term profit/transfer maximization in favor of long term root development THE WAY FORWARD

5 Sound Macro-Economic, Fiscal, and Monetary Policies:  Fiscal Policy: reduce fiscal deficit while enhancing private capital role in economic growth  Exchange Rate Policy: avoid currency devaluation war.  Monetary Policy: contain money supply/credit: fight high inflation rates  Provision of fair investment environment for investing in agriculture: reduce income inequality  Institutionalize good Government and administration PUBLIC POLICY Dr Gordian Gaeta

6 Significant Public Investment for future robust economic growth: 1.Enabling Conditions - Hard Infrastructure: to boost economic activity and increase economic linkage within the country and across the region. 2.Activity Value - Soft Infrastructure: invest in education, development and holistic care system to grow human resources PUBLIC INVESTMENT Dr Gordian Gaeta

7 Frontier – Emerging – Developed Economy – the Imperative Paradigm Shift towards a formal Economy FINANCIAL ECONOMY Formal, Institutionalized Economy Informal Economy FRONTIER ECONOMYEMERGING ECONOMYDEVELOPED ECONOMY Economic Wealth

Dr Gordian Gaeta 8 ONE INVESTOR One small investor:  Job and Skill Creation: several thousand jobs created or supported, people developed and advanced – equity cost per job created is US$30,000  Export Growth: up to 95% export from pure domestic starting point – equity cost per USD1M exported is about US$100,000

Dr Gordian Gaeta 7th Asia Economic Forum: Thank you Session V: Sustaining Asia’s Economic Recovery