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By Tao Jun, Hua Xi
HO CHI MINH CITY, June 16 (Xinhua) -- Senior policymakers from ASEAN countries and Organization for Economic Cooperation and Development (OECD) members have met in Vietnam to discuss productivity growth and middle-income trap.
The officials gathered at the Second Steering Group Meeting of the OECD Southeast Asia Regional Program on Wednesday, and the OECD Southeast Asia Regional Forum 2016 on Tuesday, held in Vietnam for the first time.
On Wednesday, at the meeting themed "The OECD Southeast Asia Regional Program Support for the ASEAN Economic Community Blueprint 2025," the participants touched upon strategic guidances to the program.
Earlier, at the forum, christened "Boosting Productivity and Inclusiveness in Southeast Asia," over 200 delegates, including OECD Deputy Secretary-General Douglas Frantz, focused their discussions on implementing the ASEAN Economic Community Blueprint, especially on lifting productivity growth, integrating small- and medium-sized enterprises (SMEs) into global value chains, and promoting a more inclusive social agenda.
According to the delegates, ASEAN needs a comprehensive strategy for enhancing productivity growth, a central driver of long-term improvements in living standards and prosperity, whilst promoting inclusiveness towards more coherent economy.
OECD Deputy Secretary-General Frantz advised ASEAN countries to intensify investment in education and training to improving skills of laborers, improve business environment, further assist SMEs in terms of integrating into global value chains.
Meanwhile, Vietnamese Deputy Minister of Foreign Affairs Bui Thanh Son said the ASEAN members should pay due attention to creating high-productivity jobs, and making good preparations on institution, infrastructure and manpower to fully tap opportunities and benefits of regional economic linkages, while narrowing development gaps.
On the occasion of the forum and the meeting, OECD held a press conference to introduce its report "Economic Outlook for Southeast Asia, China and India 2016: Enhancing Regional Ties," which mentions productivity-related issues in the ASEAN countries as well as in China and India.
According to the OECD, the emerging Asia region will face the challenge of slowing productivity growth. These trends showing a slowdown of growth in GDP and productivity are evident even before the global financial crisis. At the aggregate level, potential GDP declines in ASEAN economies, China and India after the global financial crisis of late 2000s. The decline in productivity is one of the factors contributing to the slowdown.
The OECD said that improvements in productivity are essential to drive continued economic growth in emerging Asia's wealthier economies. While their GDP growth rates have been impressive, many emerging economies around the world have seen slowing or stalled rates of growth as they have approached the levels of high-income countries.
This so-called "middle-income trap" results from the difficulties faced by economies in transitioning from previous growth strategies, such as those based on structural transformation, demographic change and factor accumulation, which naturally face limitations, to more sustainable productivity-driven growth and the development of technologically intensive economies.
Estimates by the OECD Development Center show that even in the best-case scenario, it will take some time for emerging Asia's middle-income countries to reach high-income status. Malaysia is expected to be the first to join this group in 2021, followed by China in 2028. Reaching this status is expected to take longer for Thailand (2035), Indonesia (2043) and the Philippines (2048). These estimates place Vietnam and India last among current middle-income countries in emerging Asia to leave this group in 2054 and 2055, respectively.
According to the OECD, real growth in emerging Asia is projected to moderate gradually over the medium-term (from 2016 to 2020) to 6.2 percent annually. Growth in China will continue to slow, while growth in India picks up to one of the highest rates in the region. Growth in the ASEAN region will be similar and is projected to average 5.2 percent over the 2016-2020 period, led by growth of the Philippines and Vietnam. Enditem
