Mr. Bhaskaran spoke with 30 students from SJI International on the topic "What are the Major Changes Asia Faces After the Global Crisis?"
Global Recession and the Future
Starting broadly, Mr. Bhaskaran discussed the global recession and the future. According to economic indicators, the short-term prospects look positive, with many countries having emerged from a sharp dip in their economies. However, he cautioned that there were projections of a "double dip" recession, which begs the question - is this recovery sustainable? Many issues still remain unresolved, and emerging crises loom on the horizon. Some that he highlighted include the possibility of a Sovereign Debt Crisis, especially with the contagion effect from PIGS (Portugal, Italy, Greece and Spain), and STUPID (Spain, Turkey, UK, Portugal, Italy, Dubai). The United States, despite being flexible and adaptive, also seems to be developing a fiscal time bomb. Closer to home, Japan faces the problem of deflation in its economy.
Long Term: Changing Global Economic Landscape
These looming issues contribute to the many changes taking place in the global economic landscape. Mr. Bhaskaran noted seven key changes:
- higher oil prices
- rising savings rates esp in the G3
- higher cost of capital
- fiscal tightening
- more regulation
- protectionism (tariffs and other non-tariff barriers)
- climate change concerns
Singapore and the Region: Risks exist but so do Opportunities
Economies in the region must be nimble, flexible and smart. Although things look good for Asia as a whole, Singapore needs to change and adapt as manufacturing and production in other countries play catch-up. Niche areas of expertise can be developed, and local companies must build their competency to compete on a global scale.
Mr. Bhaskaran concluded on an upbeat note: despite the "doom and gloom" of economic indicators and risk assessments, there has never been a period without challenges. The key, he stressed, is how we adjust and adapt. With this attitude in hand, we can look with confidence into the future.