Managing Director's Remarks at ASEAN Luncheon

November 4, 2019


Good afternoon and thank you for this invitation.

I am delighted that my first overseas trip as Managing Director of the IMF is to the ASEAN region, a bright spot in the global economy for the last decades. The region’s rapid growth and poverty reduction is the product of global integration and collaboration combined with sound economic policies.

And ASEAN has steadily increased its contribution to global growth. In fact, in 2019, the 10 ASEAN countries contributed 10 percent of global growth—just about as much as the 19 countries in the Euro zone. As in most of the rest of the world, however, growth in ASEAN is now decelerating.

Outlook and Risks: Synchronized global slowdown

During the Annual Meetings of the IMF, the key message was “ synchronized slowdown.” We are projecting 3 percent growth for this year, the lowest rate in a decade. And while the ASEAN region outperforms with 4.6 percent growth, this is still a downward revision from our previous estimate of 5 percent.

Why is this happening? Partly because of trade tensions taking a toll on business confidence and investment. Partly because of Brexit, high debt, and geopolitical tensions—all of these are contributing to uncertainty.

Clearly, the near-term challenge is to navigate slower growth. And for this, countries really have to tap all instruments as appropriate— monetary policy, fiscal policy, and structural reforms.

Above all, trade tensions need to be reduced. In that context, the recent announcements from the U.S. and China are very welcome, we really hope that we can go from trade truce to a sustainable, long-term trade peace.

ASEAN can help a lot in fostering trade by moving beyond trade in goods to increased integration in services, finance and labor.

Medium-term challenge: achieving sustainable, inclusive growth

ASEAN is also right to focus not only on the short-term challenges but also the longer-term goal of sustainable development.

That requires addressing issues such as inequality, pressures from aging in some countries, quality infrastructure, quality human capital, and climate change.

So, let me share some thoughts from the IMF’s research and experience:

a) Human capital

First, while the region is making a good progress on the Sustainable Development Goals (SDGs), more needs to be done, specifically, more spending for quality infrastructure, more investment in people.

The Asian Development Bank estimates that between 2016 and 2030, ASEAN needs to invest $2.8 trillion in quality infrastructure.

When we look at the human capital index for ASEAN, it is widely spread— with Singapore being number one in the world, Vietnam number 40, and the rest of the ASEAN countries spread all the way to 111.

The point is so simple: invest in people today, so you can be wealthy tomorrow.

This requires domestic resource mobilization, but it also requires making it possible for the private sector to invest for the SDGs massively.

b) Female labor force participation

Secondly, despite significant progress, female labor force participation in ASEAN is about 7 percentage points lower than the East Asia and Pacific average.

Count on women, and tap into the talent of the women of ASEAN. We estimate that this could raise per capita GDP growth in ASEAN by about 1½ percentage points and significantly reduce inequality.

c) Social protection

Third, social protection in the region needs to be at a higher level, and better targeted. For this, new identification systems, such as the ones put in place in India and the Philippines, can help target more precisely those who need assistance most.

d) Climate change

Finally, we have an urgent and collective need to make rapid progress on climate change. We can avoid a bleak future for our children and grandchildren by reducing emissions, offsetting what cannot be reduced, adapting to new climate realities, and building resilience to climate change.

Action to move from a brown to a green economy would actually be a big boost for growth in ASEAN. And those who move first would have a competitive advantage. This is not to be ignored.

To accelerate this transition—I know this is controversial—we need a price on carbon. IMF research tells us that the most efficient way to do it is by introducing a carbon tax.

Again, I know this is not a concept with which everyone agrees, but I owe you to tell what our research indicates that this is the best way to travel. The key is to retool the tax system not just adding a new tax. And the revenues would also allow to compensate vulnerable people and those most affected.


The IMF is at your disposal. We work not only in countries that are in economic trouble, but we are also available to provide advice and technical assistance.

To everybody, you can count on us! We embrace the “ASEAN Way” of collaborating and cooperating. In that spirit, we believe sustainable development can be achieved.

As the great Nelson Mandela said “It always seems impossible until it is done.”

Thank you.

IMF Communications Department

PRESS OFFICER: Keiko Utsunomiya

Phone: +1 202 623-7100Email: