HKUST Business Review

In today’s rapidly evolving global economy, the emerging markets should no longer be seen as passive participants, but more as dynamic architects well placed to reshape the international system of trade and finance. That is the view of Professor Albert Park, Chief Economist of the Asian Development Bank (ADB), and Director General of its Economic Research and Development Impact Department, who believes that Asia will be a key region for economic dynamism, resilience, and strategic opportunity in the years ahead. "The economic importance of emerging markets continues to grow relative to advanced countries," he said, highlighting a fundamental shift in global economic power. "If you look at the G20, the GDP of the non-G7 members is now bigger than that of the G7." This is a truly significant statistic. It underscores the profound redistribution of economic influence which has taken place over the past two decades. And it means that more countries, particularly those in Asia, have an increasing say in setting the global economic agenda. "Asia now accounts for nearly half of global GDP and most of global growth," Park said. In emphasizing the region's unprecedented economic dynamism, he also noted that countries like China and India as the region’s largest economies play a key role in this transformation. Of course, one thing that may slow these developments is the current uncertainty caused by newly imposed tariffs. In the short term, at least, this raises the prospect of a move towards more protectionist policies and greater fragmentation of the global economy. "Advanced economies, especially in the US, have questioned whether open trade has served the interests of their workers," Park said. He believes that this trend towards greater trade restrictions threatens the open economic model that has driven much global prosperity and brought benefits to so many people. Importance of Strategic Engagement In his opinion, the best way to keep moving forward lies in continued openness and strategic engagement. "Being part of global value chains is what raises your capacity and productivity," he said. Historically, periods of globalization have consistently benefited countries that remain open to trade and investment. This is especially the case for lower-income economies seeking to catch up with advanced economies which depends on transferring technologies through trade and foreign direct investment. In this respect, regional economic integration emerges as a critical strategy. "We see organizations like BRICS and other platforms helping emerging markets to coordinate their own policies," Park said. Greater regional cooperation can allow smaller economies to amplify their collective voice and negotiate more effectively on the world stage. It also helps them to keep pace with the digital transformation and technological innovations that are key drivers of the current phase of economic evolution. We are focusing on supporting digital transformation because it is so important for driving productivity growth. HKUST Business Review 27 Cover