Policymaking key to mitigating global economic threats, say experts

Speakers at the Singapore Economic Review Conference discussed threats to the global economic system, including the impact of populist politics, ageing populations, and the potential slowdown of China's economic growth.
Speakers at the Singapore Economic Review Conference discussed threats to the global economic system, including the impact of populist politics, ageing populations, and the potential slowdown of China's economic growth.ST PHOTO: TIMOTHY DAVID

SINGAPORE - Faced with an uncertain global environment, country leaders and policymakers must strengthen democratic institutions, while addressing citizens' economic insecurities and social grievances, said an economics expert.

Nations must also pursue policies to strengthen domestic and regional sources of growth and improve structural weaknesses, said Professor Jong-Wha Lee from Korea University.

This is important as "global growth will remain sluggish and downside risks are high," he said.

Prof Lee was speaking at the opening plenary - "Is the world under threat?" - at the Singapore Economic Review Conference (SERC), which began on Monday (Aug 5).

The three-day biennial conference will be attended by about 330 leading economists, business people, as well as past and present policymakers from nearly 40 countries, who will exchange ideas on how to accelerate the global economy.

The speakers at the opening session discussed the threats to the global economic system, including the impact of populist politics, ageing populations, and the potential slowdown of China's economic growth.

Professor Danny Quah of the Lee Kuan Yew School of Public Policy at the National University of Singapore spoke about the risks of countries' increasing unwillingness to engage in multilateral cooperation.

Quoting Greek historian Thucydides, he said that in both international and regional politics, "the strong do what they will, the weak suffer what they must".

 
 
 

Strong nations will decide the outcomes of the new world order, while small nations like Singapore will suffer the consequences, Prof Quah noted. But multilateral actions by all nations can help determine the form of world order forward, he said.

Kobe University's Charles Horioka, who specialises in macroeconomics, household economics, as well as Japanese and Asian economies, spoke about population ageing as one of the long-term global economic threats.

"There is substantial diversity among countries and regions with respect to the speed and timing of population ageing, but all countries and regions will experience population ageing sooner or later," Prof Horioka said.

Labour and capital shortages, as well as strain on government finances due to expenditure on social protection schemes, are likely implications of an ageing population, he said, but added that adopting appropriate policy measures can alleviate these impacts.

Education Minister Ong Ye Kung, who was the guest-of-honour, said in his speech that the changing global economy - with trade disputes, low interest rates and technological contests - means it is an exciting time for economists, but a time of headaches for governments.

"Democratic governance will be put to the test, made more difficult by falsehoods that will cloud pertinent information and data, thus hampering collective decision making," he said.

It is an opportune time for closer partnerships between academics and the government to tackle the biggest economic issues of the day, Mr Ong added.

The SERC is the flagship event of the quarterly Singapore Economic Review, whose chief editor is Professor Euston Quah, head of economics at Nanyang Technological University and president of the Economic Society of Singapore.

Over 300 papers covering economic science, climate change, environmental and energy issues will be presented during the conference.