Asia must stay flexible and avoid revenge moves, warns top economist
SINGAPORE: Edward S. Robinson, Deputy Managing Director (Economic Policy) and Chief Economist at the Monetary Authority of Singapore (MAS), warned Asia's economies against getting involved in or initiating punitive trade measures as trade barriers surge all over the world.
Speaking at the 12th Asian Monetary Policy Forum, Robinson advised that such reactions can do more damage than good, especially for Asia's tiny, open economies that profoundly depend on transnational trade, as reported by the Singapore Business Review.
'For Asia's small open economies, global tariffs pose a major challenge,' Robinson said. 'With trade dependencies in the region sometimes exceeding 100% of GDP (gross domestic product), the ripple effects may be severe: reduced production, and possibly, renewed capital outflows.' Tariffs hurt both sides of the trade divide
Robinson stressed that isolationist strategies such as tariffs regularly do not carry their envisioned economic gains. Rather than fixing trade disparities, they escalate costs for households and businesses, and hinder economic productivity. He contended that the genuine drivers behind the deterioration in manufacturing employment rest in deeper operational deviations such as computerisation and ever-changing consumer behaviors, not trade shortages.
'Both the targeted and tariff-imposing economies suffer,' he said, underscoring the broader economic fallout from such policies. Call for integration and structural reforms
Instead of engaging in trade wars, Robinson advised Asian legislators and politicians to exert more effort in strengthening regional trade integration and transition toward high-growth domains such as services and digital economies. He also underscored the necessity of systemic reforms, including workforce competency building, to better adjust to the changing international economic scenario.
Robinson highlighted that régimes must prudently install and position the suitable policy mechanisms, steered by cautious and calculated forecasting, to direct the international economy toward a stable, well-adjusted, and sustainable fine-tuning path. He cautions that any unexpected or inept movements, labeled as 'fragmented impulses,' could undermine the international monetary structure. Such unsystematic moves, he warns, bring the danger of activating grave financial disturbances, possibly ending in a protracted and extensive global downturn. Thus, attaining stability requires not only the appropriate tools but also lucid and concerted global policymaking. See also N. Korea warns US-S. Korea drills will affect nuclear talks
According to Robinson, 'These efforts will not only help manage short-term shocks but also build long-term resilience across Asia's economies.'
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