Frontier Asia and Hopes for More Inclusive Growth
The International Monetary Fund (IMF) and the Japan International Cooperation Agency (JICA) on January 28th held a conference in Bangkok, entitled “Frontier Asia: Economic Transformation and Inclusive Growth.” The conference brought together ministers, central bank governors, other senior policymakers and academics from the region, along with staff from the IMF, JICA and other international financial institutions. Discussion focused on what is needed for Frontier Asia to continue moving up the development ladder, and to ensure that growth and job creation benefit all segments of society.
In welcoming participants, IMF Deputy Managing Director Naoyuki Shinohara said, “The theme of this conference is quite timely. While the world’s attention has tended to focused on the region’s largest economies, there has been another important development: the achievements of Frontier Asia. These are the nations that are on a path to writing a new Asian success story.”
The frontier economies participating in the conference were Bangladesh, Bhutan, Cambodia, Lao P.D.R., Maldives, Mongolia, Myanmar, Nepal, Timor-Leste, and Vietnam. The Kyrgyz Republic also participated in the event, and Prasarn Trairatvorakul, Governor of the Bank of Thailand, offered opening remarks.
“The process of economic transformation calls for accelerated reforms.”
– Anoop Singh
With a combined population of more than 350 million people, Asia’s frontier economies are located in the world’s most dynamic region and have the potential to continue along a strong growth path and become part of the new generation of emerging markets. “In recent years, these countries have posted annual growth of 6 per cent or more—a true sign of success,” said Kiyoshi Kodera, Vice President of JICA. “This growth has produced a significant reduction in poverty, but might lead to rising income inequality, as witnessed in emerging Asia. Thus, the challenge the frontier economies now face is to make this growth more inclusive.” He recalled Japan’s experience in the 1960s, where progressive taxation and a strong social safety net were used to ensure that the benefits of strong growth were widely shared.
The conference also addressed Frontier Asia’s need to move toward more high value-added sectors, based on a new generation of reforms. Anoop Singh, Director of the IMF’s Asia and Pacific Department, said “the process of economic transformation calls for accelerated reforms. In particular, Frontier Asia will have to do more to improve institutions and increase investments in infrastructure. More emphasis also will have to be placed on improving regulatory and supervisory frameworks to keep up with the rapidly changing financial system.”