Asian Economic Growth the Center of Attention at Davos

The search for growth will define the global economic landscape in the next decade as corporations shift their focus from the West to the East.

In this major shift, emerging Asia with its 7 percent gross domestic product growth will stand out. This was the prevailing point of view by many of the leaders who spoke at various sessions on Wednesday. 

Although the general mood at Davos this year is relatively cautious, the long-term outlook for the world remains bullish. While developed countries will struggle for growth in the next 10 years, new trends already underway will add $30 trillion in gross domestic product to the global economy. These trends, which range from the addition of one billion new consumers for the first time to increased infrastructure and defense spending by emerging nations, will drive the global economy.

Indonesia’s Tourism and Creative Industries Minister Mari Elka Pangestu noted that emerging Asia’s economic growth would remain robust during the period as many nations in the region had undertaken the necessary reforms and strengthened their fiscal positions in the past few years.

The 10-member Association of Southeast Asian Nations, for example, has strengthened its economic integration and, with the launch of the Asean Infrastructure Fund, will further upgrade the bloc’s construction projects.“One of the most visible shifts in our economies is the switch from relying mainly on exports for GDP growth to boosting domestic consumption,” Mari said.

“For example, 60 percent of Indonesia’s GDP is derived from domestic consumption and we have the fiscal space to spend on infrastructure and social protection programs. Consumption and creative industries will drive future economic growth and that is what we are about. These are the exciting developments in our region,” she said.Indonesia, Mari added, can be at the forefront of new services such as developing new applications for smartphones as young entrepreneurs are using such services in creative ways.

“We have a young population, the market is there and the workers are there,” she said. The creative sector currently accounts for 7 percent of the country’s GDP, compared to 13 percent of the US economy.

Indonesian corporate leaders attending sessions at Davos include James T. Riady, a member of the International Business Council, which is the highest level committee at the World Economic Forum. He is also the chief executive officer of the Lippo Group, which owns the Jakarta Globe.

Also attending are Franky Widjaja, head of Sinar Mas Group, and his daughter; Sri Prakash Lohia, the founder of Indorama Group who has been a regular participant at Davos in recent years; and Emirsyah Satar, the president director of Garuda Indonesia, and his wife.

At the official opening of this year’s Forum meeting, German Chancellor Angela Merkel put up a passionate defense of the unity and viability of the European Union amid its worst crisis in the last 50 years. At the core of the crisis are weaknesses in the competitiveness of many European countries, she said, noting that budget deficits had accrued over the years.

“There is a clear lack of political structures and underpinnings to make this work,” Merkel said. “We are not going to become faint of heart. But we will not be able to wave a magic wand to address this. Yet at some point in time we have to do something about these weaknesses.”

She concluded with a challenge for other European leaders, saying: “The question is: Do we dare to have more ‘Europe?’ In the year 2012, yes, we do dare.”With record participation at more than 2,600 leaders from government, academia, business and civil society, the theme of this year’s annual meeting is “The Great Transformation: Shaping New Models.”

 “We have a vision gap in the world,” Klaus Schwab, founder and executive chairman of the WEF, said in his opening remarks. “My wish is threefold — that we build by searching for constructive new solutions and models, that we bond by looking for long-term vision and that we bind by creating the necessary underpinning framework of shared values.”

 At the end of that session, Schwab welcomed to the stage about 70 members of the Global Shapers, the Forum’s newly launched community of exceptional individuals under the age of 30 who have demonstrated great potential for future leadership.Nobel Peace Prize laureate and former archbishop of Cape Town Desmond M. Tutu, who is the chair of the Elders, an organization of elder statesmen from around the world, stood among the group.

 He encouraged them to “go on dreaming God’s dream of a world where war is no more and poverty is history” and to “dream of a world that is more compassionate, more gentle, more caring.”

Source - thejakartaglobe