Asia will take Important Role of World Economy

By Sok Lak

“In the near future, the Asia economy will be the leading economy in the world while recently America and Europe have experienced a big crisis which caused their economy to turn back,” economic experts and leaders said recently.

“The Cambodian economy is developing a lot while other countries in Asia are also on progress of development such as China, India and the Middle East,” Dr. Thaksin Shinawatra, Former Prime Minister of the Kingdom of Thailand said at the International Forum on “Asian Century: Challenges and Prospects” which was co-organized by the Centrist Asia Pacific Democrats International (CAPDI) and the Royal Academy of Cambodia (RAC) on September 19th at the Friendship Building in Phnom Penh.

As estimated, the economies of Asian countries are equal to 38 percent of the world’s economy, but the progress of development is equal to around 60 percent of the world economy. So developing countries need to integrate with the world.

Dr. Thaksin stressed that developing countries like Cambodia need to increase the amount of exports to the world. “Nowadays, developing countries are growing at the same rate as developed countries. However, the expense in developing counties is only 25 percent of the world as a whole and capital has only reached 10 percent in the world. With this case, it can be seen that developing countries are expanding their markets around the world and try to use their capital effectively and gain more benefit.” G3 (United States, Japan and economies of the euro-zone) is no longer supporting the world economy whereas the developing economy controls around two-thirds of the economy around the world. “Economies in Asia are growing around 7 percent to 8 percent per year which is equal to triple the rate if comparing to the economies of China and India. In ASEAN countries, the growth runs from 5 to 6 percent which is equal to twice the rate compared to developed countries.

Developed countries are likely to grow only two percent per year and the public debt will cause the growth to be less than this. “The growth among Asia countries is coming from exports to the world market,” he stressed.

The crisis in the European zone will cause its economy to drop off. It will lose the confidence of investors even though the Europeans present a positive view for investor confidence such as Germany and Italy. Even though Japan recovered her economy, the public debt is also still a big problem. “ASEAN economies should not depend on the G3 economy; we should depend on the regional economy,” he added. The European crisis became the important factor for the drop in the world economy.

Dr. Sok An, Deputy Prime Minister and Senior Vice-President of CAPDI, said that many Asian countries have gained momentum in leading the global economy during the last decade. In particular, our region today has been characterized as having robust economic growth, rapid development of industries, and basic development, accompanied by sustained improvement in the lively hoods of the people, making Asia more evident as the new center of economic development.

According to the International Monetary Fund, the Gross Domestic Product (GDP) of China has risen 9.5 percent in 2011 and will be 9 percent in 2012 while Japan has only grown 2.3 percent and 7.5 percent for India. The five countries in Southeast Asia (Indonesia, Thailand, Malaysia, Philippines and Vietnam) will only have a growth rate of 5.6 percent in 2012.

Source: The Southeast Asia Weekly, October 2-8, 2011, Vol. 5, Issue 40, Page 3