LookAtVietnam — As political and business leaders from around the world converge on Ho Chi Minh City for the June 6-7 World Economic Forum on East Asia 2010, VietNamNet interviewed Sushant Palakurthi Rao, Director of the World Economic Forum’s Asia Division.
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| Sushant Palakurthi Rao, Director of the World Economic Forum’s Asia Division |
VietNamNet:
The annual East Asia meeting of the World Economic Forum has up to now always been convened in well-developed countries like Japan, China and Singapore. Why was Vietnam selected as the host of WEF Asia 2010?
WEF Asia Director S. P. Rao: We want to recognize the dynamism of Asia’s emerging markets. In recent years, Vietnam has consistently ranked among the fastest growing economies in world. It is highly regarded for its young and skilled population. Vietnam’s economic progress has gone hand-in-hand with a growing role in regional and international cooperation. Vietnam’s chairmanship of ASEAN this year follows its successful hosting of APEC in 2006 and its entry into the WTO in 2007. For these reasons, we deemed Vietnam an ideal location to discuss how leaders from the region are responding to global challenges.
VietNamNet: Who will participate in the World Economic Forum on East Asia? Who are the ‘big names’?
Rao: Like all Forum gatherings, the summit reflects our multi-stakeholder principle. There will be over 400 key decision makers from industry, government and civil society, representing over 40 countries.
We are honoured that both the President and the Prime Minister of Vietnam will participate. From the business side, there are over 300 board level executives. Top international organizations such as the WTO, UNDP and IMF are represented by senior officials.
The Co-Chairs of the meeting — Hussain al-Nowais, Chairman and Managing Director, Emirates Holdings; Eckhard Cordes, Chairman of the Management Board and Chief Executive Officer, METRO; Hemant Nerurkar, Managing Director, Tata Steel; and Andrei Kostin, Chairman and Chief Executive Officer, VTB Bank — very much reflect the international character of the participants.
VietNamNet: What’s the significance of the theme “Rethinking Asia’s Leadership Agenda”?
Rao: While Asia has recovered comparatively quickly from the global financial crisis and is in some ways leading the global economic recovery, it cannot become complacent. At the World Economic Forum on East Asia, we want to look at how leaders from across the region will contribute to a sustainable global economic recovery in the short term and ensure the region’s competitiveness in the long run.
VietNamNet: ASEAN’s a market of 580 million people and combined GDP of over $1.5 trillion. It’s aiming to achieve economic union by 2015. Will the ASEAN bloc be able to counterbalance China’s emerging economic power in the region?
Rao: China’s influence is not emerging; it is rather a fact already. The future of both China and the ASEAN are inextricably linked, so a strong partnership between China and ASEAN is a pre-requisite for mutual prosperity in East Asia. Vietnam has shown its openness to the world by becoming a member of the WTO and becoming one of the most attractive destinations for foreign investment. Vietnam’s chairmanship of ASEAN is a chance for Vietnam to demonstrate its growing leadership in regional and international affairs by facilitating stronger cooperation across Asia.
VietNamNet: At the WEF’s Annual Meeting early this year, Vietnam PM Nguyen Tan Dung showed his expectation that in the next 20 or 30 years, East Asia will become one transparent region with the ASEAN playing a central role. Would you agree?
Rao: ASEAN has a tremendous chance to leverage its geographic position between India and China as well as its economic partnerships with both of these economies to play a central role in East Asia. However, the member states of ASEAN must collectively decide how they want to cooperate with each other in order. They must forge a common understanding of their joint role in intra-Asian affairs. ASEAN has tremendous economic, linguistic, political and cultural diversity, so there needs to be a strong model for internal cooperation and mutual understanding that can transcend these differences.
VietNamNet: What’s your assessment of proposals for an East Asian Free Trade Area (EAFTA –the 10 ASEAN countries plus Japan, China and South Korea) or a Comprehensive Economic Partnership in East Asia (CEPEA – the foregoing countries plus India, Australia and New Zealand). What could we expect from this kind of cooperation mechanism?
Rao: Should the EAFTA become reality, it would add to the already very long list of regional trade agreements (RTAs) in the region. The proliferation of RTAs in Asia and elsewhere is partly explained by the fact that many aspects of trade liberalization are more feasible in smaller groupings. RTAs therefore foster deeper integration among countries that share common interests.
It’s not all plusses. In general, the reduction or abolition of tariffs between countries expands their trade. From an individual country perspective, therefore, RTAs tend to enable trade. At the same time, however, RTAs make it more difficult for businesses to navigate the trade regime. They may disadvantage third-party countries. They may also induce countries that confer preferences to import from less-efficient but preferenced beneficiaries at the expense of more efficient producers in non-member countries. Finally, the multiplicity of bilateral and plurilateral deals may hinder the broader push toward a global trade agreements.
Thus the effects of new RTA are likely to be both positive and negative.
VietNamNet: Vietnam’s top businessmen and foreign CEOs will exchange views and perhaps seek partners at WEF Asia 2010. How should Vietnam businesses show themselves?
Rao: The overwhelming response to this year’s summit in Vietnam reflects the international business community desire to understand the dynamics of the region and to gain insight on Vietnam’s positive example in reducing poverty, sustaining high growth and opening its markets. In this regard, Vietnamese CEOs are ambassadors of Vietnam’s private sector and in their interactions with the international business community, they can share their insights on the business environment of Vietnam.
VietNamNet: Vietnam has called ‘the new tiger’ in the region. However, in the wake of the global crisis, Vietnam is facing challenges. We are seeking a new development model that will enable us to restructure the economy while sustaining poverty reduction. Can you advise us how to do that?
Rao: All Asian economies must not let the short-term recovery detract from the realities of longer-term global risks. Simply because Asia now stands in a relative position of economic strength, it cannot afford to become complacent. The emergence of new asset and real estate bubbles in Asia point to how quickly we can return to the mistakes which caused the current global economic crisis. Therefore, fiscal discipline in managing public finances, solid coporate governance and constructive regulatory mechanisms are as important for Vietnam as elsewhere in the world.
Xuan Linh
