16 hours ago
- Business
- Free Malaysia Today
Rejigging Asean supply chains will hurt but won't kill, says S'pore economist
Lee Kuan Yew School of Public Policy dean Danny Quah said the global economic landscape was no longer overwhelmed by any single power.
KUALA LUMPUR : A senior economist from Singapore has called on Asean to rejig its supply chains to navigate a new global landscape marked by rising economic protectionism, particularly by the US.
Danny Quah, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, said Asean urgently needed to adapt to the new economic landscape and focus on building resilience and a robust internal market.
'The US has withdrawn from the Paris Agreement, the World Health Organization, the World Trade Organization, and it will probably continue to do that (with other international pacts),' he said at the 38th Asia-Pacific Roundtable here today.
The conference, organised annually by the Institute of Strategic and International Studies (ISIS) Malaysia, brings together experts from across Asia-Pacific to discuss key issues impacting the region.
Quah said that while the US remained important, its share of Chinese trade had almost halved from 25% to 13% over the span of two decades, showing that the global economic landscape was no longer overwhelmed by any single power.
'We are already looking at a world without the US (as the sole dominant economic force). We need to prepare for it.
'We need to consider what policy is going to work best for the new US-protectionist landscape. We need to remember that while the US is important, it no longer overwhelms the landscape.
'We should rewire our supply chains and carry on. It will hurt, but it will not kill us.'
Deputy investment, trade and industry minister Liew Chin Tong agreed with Quah and suggested that Asean set up a development fund of its own to acquire excess production capacity in various sectors, including manufacturing.
He pointed out that the world was shifting from one that was unipolar, with the US no longer dominating the global economy.
'Instead, we are moving to a multipolar world, with Asean and the EU as a middle ground. It is increasingly apparent that tariffs will be a part of the new world order, especially with the steel industry,' Liew said.
'It is not enough to consider moving supply chains to Southeast Asia to continue exporting to the US. The Trump administration will set goalposts and change them at the last minute. We should think about the long-term and re-wire the way we think about trade.
'Asean cannot just be about free trade agreements. We should start thinking about an Asean Fund to buy excess production capacity.'
