ERIA Highlights Southeast Asia's Economic Rise at Cornell Conference

Ithaca, 3 October 2024: Dr Lili Yan Ing, Senior Economist at ERIA, delivered a keynote speech at The World at a Turning Point: Cornell Conference on Development Economics, held at Cornell University. The conference was inaugurated by Professor Kaushik Basu, Professor of International Studies of Cornell University, and attended by leading economists from around the world.

In his opening remarks, Prof. Basu likened today's global economic disruptions - such as COVID-19, supply chain challenges, and geopolitical tensions - to the Industrial Revolution, calling them a 'turning point' for economic thought. He emphasised that while policymakers have addressed immediate crises, deeper academic enquiry is still needed to tackle underlying issues. The conference brought together top researchers to explore both urgent and systemic economic challenges.

Dr Ing began her keynote by highlighting significant shifts in global economic power, particularly the rising influence of emerging economies. She pointed out that countries dominating the global economic landscape until the early 1970s are gradually losing their prominence. Major developed nations like the US, Germany, Japan, the UK, France, and Italy have seen declines in their shares of global gross domestic product (GDP), trade, manufacturing value-added, and foreign direct investment (FDI), while emerging economies are gaining prominence at an impressive pace. China, in particular, has taken the lead, followed by India, the Republic of Korea, and Southeast Asia.

Dr Ing further explained that this shift has also affected FDI inflows and outflows. Since 2005, countries like China, the Republic of Korea, and Southeast Asian nations have seen sharp increases in both FDI inflows and outflows, particularly in key sectors such as semiconductors and digital technology. Notably, Southeast Asia has emerged as a global manufacturing hub for electronics, with ASEAN's semiconductor export value rising from US$52 billion in 2017 to US$165 billion in 2022.

In her conclusion, Dr Ing outlined the critical steps Southeast Asia must take to ensure continued success. These include addressing the declining share of manufacturing in GDP, reducing reliance on resource-based exports, and overcoming trade and investment barriers. She stressed the importance of improving infrastructure, practicing fiscal prudence, and embracing digital transformation to stay competitive in the global market. For Southeast Asia, the key to future growth lies in optimising its comparative advantages and strengthening economic partnerships.