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Five challenges the emerging market policymakers face

Asjadul Kibria | Published: February 15, 2017 19:19:56 | Updated: October 22, 2017 18:40:29

Five challenges the emerging market policymakers face

The meeting of the Asia-Pacific Business Forum (APBF) held in Dhaka last week received significant attention from international quarters. 
During the February 08-09 event, PricewaterhouseCoopers (PwC), a London-based multinational services network, released its latest update of its flagship report titled The World in 2050. The report mentioned that by 2050, half of the top 32 economies of the world will be from Asia and the Pacific. 
While the main objective of this year's forum was to decode the relevance of the greater regional integration to achieve the Sustainable Development Goals (SDGs), the PwC analysis restates the greater prospects of the Asia-Pacific region. Generally, the greater region includes mostly East Asia, South Asia, South-East Asia and Oceania. It's also known as core Asia-Pacific region.  
The formal grouping of this greater region sometimes goes beyond this geographic identity and includes Russia (on the North Pacific) and American countries (on the cost of Eastern Pacific Ocean). The largest formal country-grouping is the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). This UN body includes the United States, United Kingdom, France, Germany and Russia among its 53 member countries.  Nevertheless, when UNESCAP and other bodies talk about Asia-Pacific region, they generally focus on the core region along with Central Asia and part of Middle-East. 
Whatever may be the complexity of defining the actual geo-politico-economic boundary of the region, the main thing that emerged in the APBF meet is the focus on Asia and Oceania.  Moreover, this also indicates that the countries of the region are already integrated with each other in one way and another. That's why, when the Dhaka meet of APBF stressed on fostering regional integration by adopting wider connectivity, it was simply a reaffirmation of the existing regional policy. 
The Dhaka meet asserted that connectivity is not only transport-and trade-related, but also implies people-to-people contacts. Connectivity of transport and trade, however, has to go a long way. It requires strong political will of the leadership of the countries, higher investment and better infrastructure. Infrastructure here means both physical and virtual. While port, road and rail networks are a must to carry and transfer goods across the region, expansion and uses of online or electronic network is essential for trade facilitation. 
The APBF meet rightly pointed out that the region is lagging behind in trade facilitation although some of the countries like Singapore, South Korea and Australia are successful in adopting a range of trade facilitation measures. As the Trade Facilitation Agreement (TFA) of the World Trade Organisation (WTO) is coming into force in the near future, the Asia-Pacific countries need to be more active to implement the agreement. 
One important message of the Dhaka meet of APBF is businesses' assertion to support effective realisation of the SDGs. Officially known as Agenda 2030, the 17 broad goals and 169 targets of the SDGs are global commitment to make a poverty-hunger-pollution-violence free world by 2030. This very ambitious agenda needs strong support from the private sector and businesses have a crucial role to play in providing jobs and running the wheels of national as well as global economy. As the founding principle of the APBF is to provide a wide platform for regional public-private sector dialogue on the role and needs of business in achieving inclusive, resilient and sustainable development, the assertion to support SDGs is commendable. 
The PwC report also mentioned the critical role of the businesses while projecting the economic powerhouses of the world in 2050. PwC is of the view that although today's advanced economies would continue to have higher average incomes, emerging economies should make good progress by 2050 as a number of new emerging markets would take the centre stage. For instance, Indonesia may emerge as the fourth largest economy in 2050, followed by China, India and the United States. According to PwC projection, six of the seven largest economies in the world could be today's emerging economies by 2050.
The report suggested that businesses need to adopt flexible, dynamic and patient strategies to explore these rapidly evolving and maturing emerging markets. It also advised the businesses to be patient enough to ride out the short-term economic and political squalls that would occur from time to time in these emerging markets as they move towards maturity.
 PwC also pointed out that to realise this economic potential, governments of emerging markets need to implement structural reforms to improve their macro-economic fundamentals and institutions. This is a generalised suggestion applicable to all. 
In this context PwC rightly mentioned five key challenges, especially for the policymakers of the emerging markets, to achieve sustainable long-term growth. These are: falling global trade growth, demographic change, climate change, rising inequality and growing global uncertainties. Similar kind of concern was also echoed in the APBF discussion. The participants, representing government, global bodies, businesses and think-tanks, expressed unease over the slowdown in global trade. They also acknowledged that rising inequalities in different countries is becoming a matter of concern.
For Bangladesh, hosting the APBF carried significance for the future. The International Chamber of Commerce- Bangladesh (ICCB), in association with the Ministry of Commerce and UNESCAP, organised the event. The timing is also notable for several reasons. For instance, this year (2017) UNESCAP enters into the 70th year of its establishment. 
 More importantly, the PwC report highlighted potential of Bangladesh. While it reaffirms its previous projection that the country will emerge as the 23rd largest economy in 2050, it added this time that Bangladesh would be the 3rd fastest growing economy after Vietnam and India by 2050. 
asjadulk@gmail.com
 

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