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Monday, October 4, 2010


Asia is the region that contained approximately 60% of the world population, which accounts for about 4 billion people. Over the last decade, the economic growth in Asia has been fantastic. This is partly due to the macroeconomic and structural reforms and management as well as the growth seen in emerging China. On average, Asia has recorded a growth of 6% per year. This is quite a remarkable feat as Asia’s share in the global economy is now one third. This economic growth has helped to lift a lot of people out of poverty and improve their livelihood. Today, the leading region in the economic recovery is Asia. All of these are because of the strong fundamentals and quick and forceful policy responses to the crisis implemented by the leaders of the countries. The ability of most Asian countries to respond to the recent crisis is due to the significant structural changes made in Asia’s financial sectors after the 1997/98 crisis.

However, there is still a lot for Asia to learn before emerging as the leader for the post-global crisis economic world. Here are some of the crises that Asia will face in the near future. The rising standard of livings in China and India will eventually lead to a slow down as both the countries are currently providing cheap and amply labour in the region. There are also political issues between countries such as Pakistan and India that constantly pose threat to one another which prompt the government to invest heavily on military force. Japan is also another country that is finding it difficult to find new innovation and move beyond stagnation. The Dubai debt problems is also another warning and indication that more changes are needed. You could actually feel that each country face a different challenges in the days to come and emergent Asia needs to move beyond modernity into postmodern world to face these challenges.
Postmodernism in this context does not mean that Asian countries to linger around the uncertainties of the world but it means the need to deconstruct the old thoughts before constructing new ideas and image of the future for the world. As mentioned above, there might be a lot of different challenges faced by different countries in Asian countries but the biggest challenge faced by countries in this region over the next decade is the need to emerge into a new mindset. This is why Asia must learn to move beyond modernity into postmodernism. The old thinking needs to be replaced with new ideas, visions and stories just as no one pours new wine into old wineskins. If he does, the new wine will burst the skins, the wine will run out and the wineskins will be ruined. The new era has come and we could not contain growth and development with old perspective. This is an important part of growth because there is a need for transformation in adapting to the new challenges. With new risks within and across borders, it is necessary for Asia to maintain a strong supervisory regime going forward, including by building up risk assessment capabilities and adopting a macro-prudential approach to supervision.
There are many people who wonder why the need for a new perspective while Asians are heading the right direction. The problem is that most Asian countries have been so used to being colonized that it seems awkward and impossible to lead in the global economy recovery. One of the countries in Asia that is showing the right frame of mentality is Korea. In fact Korea represents the success story in Asia far better than most countries. Let us not forget that at one time, Korea was the second poorest country in the world, second only to Niger but it is now the 4th largest economy in Asia and the world’s 15th or 12th if according to the purchasing power parity.
The innovation and willingness to redefine the image of their country has helped South Korea to where it is today. Even though the nation was not recognized for their ability to grow, Korea had been determined to create local competitive countries that would be recognized worldwide. In the mid 1960s, Korea was an export-led developing country and the Korean firms supplied big multinationals with components or even the entire products. However, the Koreans had the determination to manufacture products under its’ own brands instead of the brand of other companies. Initially it was a very difficult journey for the country and the efforts and struggles put in were often painful experiences. Most people would remember Hyundai’s first disastrous foray into the U.S car market back in the late 1980s and early 1990s. However, they have not given up on their dream and with financial and government backing for the private companies, Korea has been able to achieve its’ feats today.
However, many other nations are lacking on the mindset to strive to achieve in Asia. A lot of the countries in Asia are comfortable with where they are at. Middle East countries are happy with the oil resources that they have but for how many years will these resources last? What will happen when green technology is being developed as replacement for petroleum fuel? Japan is finding it hard to get away from their “savings” mentality regardless of the low interest rate in the bank. There is a looming mood in the nation especially since deflation, the curse of the "Lost Decade" of the 1990s, is back with a paralyzing bite. Prices and wages are falling as aging consumers save their pension checks and wait for still-lower prices. Even as Korea might have seen so much improvement in the last few years, there is indication that the work ethic in the country might have caused the workers to burn out. The lack of consumer culture and burn out of employees are issues that must be taken seriously. The leaders of the country must also be aware not to move into the direction of Japan where it is hard to move further ahead. On the other hand, China is the force that must be reckoned in the near future but there is still a lot of work to be done especially in developing their domestic markets further. The change in mentality will help to drive innovation and creativity in Asian countries.
The lack of professionals in the technology industry should also be a warning and indication that more work must be done to help Asia connect with the world. Globalization has been helped largely by the existence of internet but until today, there is no well-established technology company from Asia in the internet field. The recent issues regarding the censorship of internet search results had resulted in a long-running-stand-off between Google and China. At one point, Google even threatened to pull out of China. This is one of the important changes that must be made. Censorship on the internet could result in manipulation of information and this is not a good sign for China. The search engine in China, Baidu might be quite popular in China but had recently been sued by, another Chinese Internet Portal for launching DDOS attacks on their servers. While it is not an issue for Asian countries to depend on the companies from other countries, the lack of knowledge workers in this field is something that must be considered given that most of the masterminds behind Google, Microsoft, Apple and many others are from the Western countries.
All of these could be overcome with the right mindset. It is important that Asians learn to be more innovative and creative. Instead of always looking into the products and success of other countries, Asians need to come out with something of their own. It is just like how the Japanese and Koreans being able to establish themselves as well known car manufacturers. The leaders in the countries need to spend more money and invest heavily on research and development to bring about the positive results. Instead of struggling with politic issues and corruption such as those happening in Thailand, Philippines and many others, Asians should set the right direction. Singapore has been very successful at this as the country is very stable politically and has seen positive results in fighting against corruption. With all the unnecessary distraction set aside, the country could focus the funds on research and development, building proper infrastructure and providing the support to the private companies. Singapore is on the right track in this issue and the country has one of the best and most efficient public transportation in the world. If you want to know how much should be spent on research and development, one example is Microsoft which spent 8 billion US dollar on research and development in 2008 alone.
Other areas that Asians are lacking in include the development of clean energy. This is probably one area that the Asians need to work on. Science has identified black carbon as one of the elements that impact the regional climate. In fact, several studies and research have identified Asia as the largest source of black carbon emissions globally. All of these are from contained combustion such as combustion in engines, stoves, and kilns, accounting for more than half of all such emissions. Other than that, open combustion such as forest fires, land clearing through fire, and burning of agricultural wastes also lead to the omission of black carbon. There are some efforts in developing clean energy such as the Asia Clean Energy Forum (ACEF) 2010, which was held in Manila on June 23-25 this year. It is Asia’s premier event for policymakers, technical experts and investors to share knowledge and up-to-date developments in clean energy in the region. However, given the vast potential in this region to develop the clean energy, more efforts should be taken in developing green technology.
It is also important to take note that the environment issue will also be another important challenge that will be faced by all Asian countries. The change of perspectives and thoughts will help Asians to prepare themselves and plan the development of their cities and countries. This is important to allow emergency help to be provided to rural areas when there is a need such as flooding that occurs frequently in some countries such as China. Besides Singapore, most of the other countries in Asia do not have proper infrastructure development. This will lead to the dependence on vehicles that use petrol that contribute to the air pollution. If the infrastructure development could be planned in advance, this could help to encourage the citizens to use public transportation. This effort could reduce the release of carbon dioxide into our environment. Other important steps would be proactive participation in recycling and other environment friendly activities. The new set of mindset will help Asian to prepare for all these uncertainties.
From all of these, we could easily recognize that the most important challenges facing Asia over the next decade is to emerge into a new set of thinking. The new thinking and mindset will help the Asians to form new ideologies, ideas and all of these will lead to innovation and restructuring of the fundamentals in the countries. However, it is not easy for one to find solution to these changes. After all, it takes a long period of time for transition of thoughts and perspectives especially since most Asians are tied closely to their culture. For example, the Chinese believe strongly in hard work and discipline, which is a good characteristic in any individual. However, it is important for Asians to learn to work smart as well. Flexibility in working hours is also important to avoid burn out workers. Although the Chinese form one of the most hardworking and discipline group of workers, most of these people are not able to think out of the box in their working environment. They are trained to do the same work repetitively.
This is why postmodernism is important in this context. While the characteristic of hard work and discipline are important for all skilled and knowledge workers to have, it is also important for these group of people to learn to be more flexible, see things from a different perspective and learn to think outside the box. This will help to generate new ideas and innovation. One of the ways to encourage this thinking among the workers in Asia is to organize motivation talks, provide a better and more comfortable working environment as well as encouraging independency at work. Instead of judging the performance of the workers by their hard work, more values should be placed on the results and ideas given by the workers. It is also important to allow exposure to cultures from other countries and regions. While it is important to maintain the culture and hold firm to the beliefs of one culture, it is also necessary to look at the positive attribute from other cultures and apply them into our daily lives. All of these should be stressed in education as well as through the media.
Transparency is also an important concept that must be implemented so that Asians could see things from different perspectives and not just through the eyes of their government. Internet transparency is important as we can see from the conflict between Google and China. If the leaders of Asian countries are able to see the need for transparency in all areas of their administration, the citizens will have more faith in their work. Trust and integrity is important because people only practice honesty when they see the value in trust and integrity. One country that has been very successful in Asia at this level is Singapore.
It is also important to look into the work force of the country and make sure that it is balance in terms of age group and qualification. For example, it is very dangerous if the work force is full of people who are at the age of 60 and above. This group of people might be able to provide stability and with their experience, they could provide insights into the possibility of what might happen in the future but they are also the group of people that find it difficult to think outside the box. Due to years of training over the same thing, they are not capable of looking at new ideas and thus eliminating innovation in the process. This could be seen in the case of Japan as of now. The right mixture of young and old will help to provide this balance for innovation and development. These will help both the young and old to learn from one another and thus, enhancing their knowledge and perspective.
The journey towards the next decade is still a long way to go but if Asia is to be the leader in the post-global-crisis world, they must take a giant leap of faith for new ideas and perspectives. There will definitely be more challenges ahead but the most important challenge is the perspective and mindset of Asians. Asians must no longer look at others for ideas and perspectives. They should learn to look within and think of a bigger picture. IMF’s Dominique Strauss-Kahn states that Asia should play a leadership role in guiding the global economy to a new, more sustainable path for growth. Minister Mentor Lee Kuan Yew said in Washington that a changed world order is upon us. All of these are possible but it could only happen if Asians are willing to move forward with the new perspective.

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