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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. AGENDA.

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Dr Gordian Gaeta

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  1. 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. AGENDA • (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 2 Dr Gordian Gaeta

  3. CHALLENGES • 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 3 Dr Gordian Gaeta

  4. THE WAY FORWARD • 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 4 Dr Gordian Gaeta

  5. PUBLIC POLICY • 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 5 Dr Gordian Gaeta

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

  7. FINANCIAL ECONOMY Frontier – Emerging – Developed Economy – the Imperative Paradigm Shift towards a formal Economy Informal Economy Economic Wealth Formal, Institutionalized Economy FRONTIER ECONOMY EMERGING ECONOMY DEVELOPED ECONOMY 7 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 8 Dr Gordian Gaeta

  9. 7th Asia Economic Forum: Thank you Session V: Sustaining Asia’s Economic Recovery Dr Gordian Gaeta

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