Asean Growth Can Be Dampened

Asean is expected to grow faster than most other regions this year, but is also facing headwinds that include trade tensions and technological disruptions, Singapore’s Finance Minister Heng Swee Keat said.

Speaking at the 22nd Asean Finance Ministers› Meeting in Singapoare, he said that the Asean finance ministers are meeting at a time of optimism for the regional economies. Asean grew by 5.1% by 2017, according to International Monetary Fund estimates, Asia News Network reported.

“However, we should not take this positive outlook for granted. We are only too aware of the headwinds that lie ahead—including rising protectionism and trade tensions, technological disruptions, and demographic trends,” Heng said. “If not managed well, these profound forces can dramatically affect our growth trajectories. But, working together, we can rise to meet these challenges.”

Wrapping up the Asean meetings this week in Singapore, he noted that globalization has lifted millions out of poverty, but has also «negatively affected» certain segments.

Asean members would therefore need to find ways to integrate their economies, while simultaneously making structural changes to improve financial connectivity across the region, and to develop the skills of its people.

«We need to send a strong signal that trade tensions, if they escalate into something worse, will not benefit anyone. We must continue to have very strong commitment to trade and to openness to the globalization process.»

Heng also identified financial technology (fintech) as an important plank of cooperation in Asean. Fintech lowers costs significantly and can thus foster financial inclusion.

He told reporters that it is too early to revise growth projections for Asean, and that the members had «spent quite a bit of time discussing trade matters», he said at a joint press conference with his counterparts from the Philippines and Thailand.

Members of Asean are due to hold meetings with China, Japan and South Korea at the forum known as the Asean+3 in May.

Governor of the Philippine central bank Nestor Espenilla Jr noted that fintech innovation in areas such as credit scoring and simple payments are new solutions that traditional banking methods have not been able to provide.

Veerathai Santiprabhob, governor of the Bank of Thailand, pointed out that Thai banks have not charged transfer fees for the inter-bank transfer service known as PromptPay, given that fees for such digital retail payments are significantly lower.