Asia needs solid structural policies, complementary relationships: Minister Heng

Asia has enjoyed rapid growth in the past several years as it was in a "catch-up" phase driven largely by an expanding labour force.

But as the region's demographic trends change, it will have to focus more on designing and implementing sound structural policies to ensure that economic growth can be sustained, said Education Minister Heng Swee Keat.

He was speaking at a forum organised by the Asia Competitiveness Institute at the Lee Kuan Yew School of Public Policy, one of a series of events that the school is holding to celebrate its 10th anniversary.

"These structural policies cover a very wide range, from physical and digital infrastructure, to education, research and development, the structure of the labour market and its degree of flexibility, the rule of law, the predictability of policies and so on," Mr Heng said.

However, such policies are also difficult to implement well, he added.

"The results will show only in the long run but the pain is immediate and some groups will be more aversely affected than others, while the benefits of good policies are spread across the whole population."

And as global economies are increasingly interconnected, the policy changes in one market can have ripple effects on others, Mr Heng noted.

What this means is that policymakers should look at building cooperative and complementary relationships with one another.

In this regard, a recent study conducted by the Asia Competitiveness Institute comes in very useful, he said, as it gives economies an indication of where they are today and where their future threats and opportunities are.

"I think a competitiveness study and a competitiveness strategy, taken in the right spirit, can spur us to contribute, to compete, to create better investment conditions and at the same time it should also spur us to cooperate, so that we can each occupy distinctive niches and can complement each other."