## Managing Director's Remarks at ASEAN Luncheon

_IMF News, November 5, 2019_

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## Bibliographic details
- Published: November 5, 2019

---

### Introduction
- First overseas trip as Managing Director of the IMF was to the ASEAN region.
- ASEAN has been a "bright spot in the global economy" with rapid growth and poverty reduction driven by global integration, collaboration, and sound economic policies.
- In 2019, the 10 ASEAN countries contributed 10 percent of global growth—just about as much as the 19 countries in the Euro zone.
- Growth in ASEAN is decelerating alongside the rest of the world.

### Outlook and Risks: Synchronized global slowdown
- Global projection: 3 percent growth for this year, the lowest rate in a decade.
- ASEAN projection: 4.6 percent growth in 2019, a downward revision from the previous estimate of 5 percent.
- Causes of slowdown:
  - Trade tensions reducing business confidence and investment.
  - Brexit, high debt, and geopolitical tensions increasing uncertainty.
- Policy guidance for near-term navigation of slower growth:
  - Tap all instruments as appropriate—monetary policy, fiscal policy, and structural reforms.
  - Reduce trade tensions; welcome recent announcements from the U.S. and China and hope to move from a trade truce to a sustainable, long-term trade peace.
  - ASEAN should deepen integration beyond goods to services, finance, and labor.

### Medium-term challenge: achieving sustainable, inclusive growth
- Long-term priorities: address inequality, pressures from aging in some countries, quality infrastructure, quality human capital, and climate change.
- IMF research and experience highlights the following areas:

  - a) Human capital
    - More spending is needed for quality infrastructure and more investment in people despite good progress on the Sustainable Development Goals (SDGs).
    - Asian Development Bank estimate: between 2016 and 2030, ASEAN needs to invest $2.8 trillion in quality infrastructure.
    - Human capital index dispersion in ASEAN:
      - Singapore: number one in the world.
      - Vietnam: number 40.
      - The rest of the ASEAN countries spread all the way to 111.
    - Recommendation: invest in people today; mobilize domestic resources and enable massive private-sector investment for the SDGs.

  - b) Female labor force participation
    - Female labor force participation in ASEAN is about 7 percentage points lower than the East Asia and Pacific average.
    - Potential impact: tapping women’s talent could raise per capita GDP growth in ASEAN by about 1½ percentage points and significantly reduce inequality.

  - c) Social protection
    - Social protection needs to be at a higher level and better targeted.
    - New identification systems (examples cited: India and the Philippines) can help target assistance more precisely to those who need it most.

  - d) Climate change
    - Urgent collective need to make rapid progress on climate change: reduce emissions, offset what cannot be reduced, adapt to new climate realities, and build resilience.
    - Transitioning from a brown to a green economy would be a big boost for growth in ASEAN; early movers would gain competitive advantage.
    - Policy recommendation (supported by IMF research): introduce a price on carbon, with the most efficient approach being a carbon tax.
      - Key design point: retool the tax system rather than simply adding a new tax.
      - Use carbon revenues to compensate vulnerable people and those most affected.

### Conclusion
- The IMF is available to provide advice and technical assistance to all countries, not only those in economic trouble.
- The IMF embraces the “ASEAN Way” of collaborating and cooperating to help achieve sustainable development.
- Inspirational close: Quoting Nelson Mandela—“It always seems impossible until it is done.”

*Managing Director's Remarks at ASEAN Luncheon — November 4, 2019*

---


## References

- [https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)
- [People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm)
- [India and the IMF](http://www.imf.org/external/country/IND/index.htm)
- [Philippines and the IMF](http://www.imf.org/external/country/PHL/index.htm)
- [Singapore and the IMF](http://www.imf.org/external/country/SGP/index.htm)
- [Vietnam and the IMF](http://www.imf.org/external/country/VNM/index.htm)
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_Source: https://www.imf.org/en/news/articles/2019/11/05/sp110419-md-remarks-at-asean-luncheon_