World Economic Forum on East Asia: Responding to global challenges = Understanding differing priorities?

Mari Elka Pangestu - World Economic Forum on East Asia 2011

The President of Republic of Indonesia officially opened the World Economic Forum (WEF) on East Asia this morning. On the first day of the 20th World Economic Forum on East Asia, a plenary session chaired by Professor Klaus Schwab, the Forum’s Founder and Executive Chairman, discussed how Asia is responding to global risks. Indonesia was represented by the Trade Minister Dr Mari Elka Pangestu (pictured). The summary of the session published by WEF can be found here. Readers can watch the full video at here.

The GoLive Indonesia Project members have been following the Forum and tweeted some of the key lessons from the session. The plenary session has provided such a great insight into the mind of global thinkers ! Whilst many of the issues mentioned by the speakers were not entirely new such as food security, unemployment, deforestation, natural disaster management, it was interesting to learn that the biggest concern of each speaker was different between one and another.

As a trade minister of a country with over 200 million population and 14% of them are living under the poverty line, Dr Pangestu’s biggest concern is food security (a problem which she said can sometimes keep her awake at night). Having a similar challenge, Batbold Sukhbaatar, the Prime Minister of Mongolia, presented that his country had serious concerns about environmental degradation and water scarcity.

Given recent food price volatility, food security issue is most likely shared by policy makers in many other developing countries. The World Bank’s February 2011 Food Price Watch reported that compared to 2010 global food prices have soared about 36 per cent pushing 44 million people below the $1.25 a day poverty line. The report suggested that another 10 million people would be pushed into poverty if prices rise another 10 per cent. The urgency of this issue requires immediate actions and as suggested by Dr Pangestu “we should not wait until the next food price spike before we act”. Dr Pangestu suggested five ways to respond to food insecurity:

  • Food reserves to deal with price volatility;
  • Well-informed policy;
  • A construction of transparent database which covers information about production and consumption of food commodities;
  •  Investments in research and development in the light of climate change; and
  • Multilateral agreements

Dominic Barton, Worldwide Managing Director of McKinsey & Company and a Co-Chair of the World Economic Forum on East Asia, offered a different view. His biggest concern was unemployment especially youth employment. Global unemployment was projected by the International Labour Organization at 6.1% (see more here). The ILO reported that Worldwide, 78 million young people were unemployed in 2010, well above the pre-crisis level of 73.5 million in 2007, but down from 80 million in 2009. Unemployment in the 15-24 age group stood at 12.6 per cent in 2010, 2.6 times the adult rate of unemployment. Mr Barton argued that unemployment may lead to protectionism.  In the face of globalisation, the risk of unemployment is even greater in developing countries that are not able to compete in the global economy. On the other hand, globalisation also makes a country’s production level including its ability to absorb employment become highly dependant on the fluctuation in the global market.

Other speakers also offered great ideas about their biggest global worry. For example, Professor Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore recalled that during the 1997 Asian financial crisis US and European policy-makers were advising East Asian countries including Indonesia how to reform.  Mahbubani criticised that now “they cannot accept the same bitter medicine that they gave to Asia and they continue to drift. What happened to Western confidence? That’s my number-one worry.”

Looking at different responses to the question ‘what is your biggest worry?’ that each speaker presented, perhaps it is wisely to conclude that responding to various global challenges simply means understanding that each of us might have different views of what is the most important issue for us.Whilst all of the issues are important, these can be sometimes conflicting between one and another. Given global connectivity, a country’s priority can affect the welfare of other countries. As an example, a country’s decision to impose export restrictions to  stabilise the domestic price in the light of promoting food security may worsen the poverty incidence in the importing countries and reduce unemployment in the producing country.

The spirit of promoting dialogue between global community leaders as demonstrated by the WEF is exactly what is needed. As Prof Schwab nicely summarised:

The number-one risk is deglobalization – the failure of the global system to cope with the complex issues we are confronted with,

Solving global issues requires global actions. This was agreed by Atsutoshi Nishida, Chairman of the Board of Toshiba Corporation and Vice-Chairman of Nippon Keidanren (Japan Business Federation) who viewed that the Japan earthquake is an opportunity to accelerate such cooperation. At this moment, as suggested by Brian A. Gallagher, President and Chief Executive Officer of United Way Worldwide (one of the biggest NGOs in the world) “our decision-making process is still too national in its origin in terms of creating multi-sector goals”.

So, what is your biggest worry?

 

*This article is prepared by Risti Permani.

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4 Comments

Filed under Conference, East Asia, Economic Integration, Indonesia, WEF

4 responses to “World Economic Forum on East Asia: Responding to global challenges = Understanding differing priorities?

  1. Great summary of Day 1 – thanks!
    Keep an eye out for any ‘social media corner’ style interviews coming out of the #WEF in Jakarta. If you find any, please share links here and on twitter.
    Keep up the great work.

    My biggest worry is that people tend to substitute ‘economy’ for ‘society’.

    Mike

  2. Pingback: World Economic Forum on East Asia: Lessons to be learnt « Indonesian Labour Studies (ILS)

  3. Pingback: World Economic Forum of East Asia: Our thoughts | GoLive Indonesia

  4. Pingback: The ASEAN-BIS Day 3 (18 November 2011) – ASEAN and Republic of Korea | GoLive Indonesia

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