ST Global Forum: Asia is about to enter new golden era, says Kishore Mahbubani

Straits Times foreign editor Ravi Velloor (left) with Professor Kishore Mahbubani. -- ST PHOTO: NG SOR LUAN
Straits Times foreign editor Ravi Velloor (left) with Professor Kishore Mahbubani. -- ST PHOTO: NG SOR LUAN
Professor Kishore Mahbubani. -- ST PHOTO: NG SOR LUAN
Professor Kishore Mahbubani. -- ST PHOTO: NG SOR LUAN
Straits Times foreign editor Ravi Velloor (left) with Professor Kishore Mahbubani. -- ST PHOTO: NG SOR LUAN
Straits Times foreign editor Ravi Velloor (left) with Professor Kishore Mahbubani. -- ST PHOTO: NG SOR LUAN

SINGAPORE - Asia is about to enter a "new golden era" over the next decade, Professor Kishore Mahbubani, an expert on Asian and international affairs and Dean of the Lee Kuan Yew School of Public Policy, told The Straits Times Global Outlook Forum on Friday.

In his keynote speech, Professor Mahbubani attributed the coming good tidings to a combination of three factors.

The first factor, he said, was the arrival on the scene of dynamic leaders in the three most populous countries of Asia - China's President Xi Jinping, India's Prime Minister Narendra Modi and Indonesia's President Joko Widodo.

The second factor was the triumph of pragmatism, with the replacement of the Washington consensus with the Deng Xiaoping-Lee Kuan Yew consensus on national development.

ST 20141022 OUTLOOK22B 760340m

Washington consensus means a reliance on free markets to drive growth. The other model, sometimes also called the Beijing consensus, believes in nifty intervention by the government to mobilise resources that can help a country achieve remarkable growth quickly.

The third factor was gravitational pull exerted by the sheer mass of Asia's middle-class population - that is projected to grow to 1.75 billion in 2020. This will create a new class of consumers to propel Asia's growth story, ensuring that multinational firms continue to flock to Asia.

So what are the clouds on the horizon?

Challenges will arise if some significant bilateral relationships sour, said Professor Mahbubani. That is, if the US and China descend to outright rivalry, if China and Japan give in to mutual animosity, and China and India do not manage to overcome mutual mistrust.

 As for scary headlines from the militant radical group Islamic State in Iraq and Syria or from the sovereignity crisis in Ukraine, which has counter-intuitively pulled Russia closer to China rather than the West, those are largely distractions that will not alter the arc of Asia's history, Professor Mahbubani said. The West is preoccupied with these, and missing out on the changing dynamics in Asia, he said.

That is why it may be better to read The Straits Times, rather than the New York Times or the Financial Times to understand the Asian century, he said.

Asean has a critical role in the coming decade, he added. Given the less than wholesome bilateral relationships between Asia's major powers, Asean can only grow in importance in the coming years as a platform of choice when key countries want to talk, he added. 

"The only regional organisation that enjoys the trust of all key powers - the US, China, Japan, India and Russia is Asean."

"A new geopolitical window of opportunity will open for Asean in the next decade," he said.

ANZ's chief economist Glenn Maguire, who addressed the audience next, concurred with Professor Mahbubani's assessment on Asia's brightening prospects, pointing out especially to an unexpected bonus from the falling prices of crude oil and other commodities.

 Although there are widespread concerns about China's slowdown, Mr Magguire pointed out, the Asian giant is still capable of adding on US$1 trillion (S$1.3 trillion) of output a year, with spillover effects on other economies.

The other source of optimism is the US expansion, especially with the falling gas prices buoying demand from US consumers. The recovery will pave the way to higher interest rates but the effects are absorbable, he said. 

On Singapore, Mr Magguire said "2015 will be year of two halves." The first half will remain difficult as the economy continues to transition to producing higher valued-added goods and services.

"Singapore has had to make difficult policy choices, that is squeezing the supply side of the economy."

But with the falling commodity prices lifting domestic consumption in the US, Japan and Europe, the demand is rising for high-end goods, consumer electronics, tablets, smartphones, produced by Asia.

"Second half will be very, very promising," he added. 

The ST Global Forum, now in its third year, has become a key event in the Singapore calendar. 

Among the 400-strong audience were execuitves, policymakers, academics, businesmen and diplomats. Also present were SPH chairman Lee Boon Yang, CEO Alan Chan and English and Malay newspapers division chief Patrick Daniel.

Other speakers include renowned editors T.N. Ninan of India and Endy Bayuni of Indonesia and Singapore-based academics Li Mingjiang and Lam Peng Er, experts on China and Japan, respectively.

Engaging them will be senior journalists from The Straits Times newsroom - news editor Peh Shing Huei, author of a book on China, where he served as bureau chief; Indonesia Bureau chief Zakir Hussain, and Tokyo- based senior economics correspondent Fiona Chan. 

bhagya@sph.com.sg