For years, dynamic and vibrant East Asia seemed immune to the problems plaguing Europe and North America, from slow growth to unemployment. With a projected average growth rate of above 7% in 2015, East Asia remains the world’s fastest-growing region as well as its most populous.
Its stars include global heavyweights such as China, South Korea and Japan, as well as emerging economies from Myanmar to Indonesia. Yet political, social and economic tensions have affected even this outstandingly successful region. The key to easing tensions and securing the path to prosperity is trust.
How to build, restore and sustain trust will be at the centre of the 24th World Economic Forum on East Asia in Jakarta, Indonesia, from April 19-21 which brings together over 700 participants from a diverse array of global and regional businesses, policymakers, and civil society organizations across geographies, under the theme of “Anchoring Trust in East Asia’s New Regionalism”.
Through the lens of the New Regional Context, leaders will grapple with the balance between optimism about enhanced regional collaboration in light of the forthcoming ASEAN Economic Community and caution about geopolitical tensions that could undermine progress toward regionalism and shared prosperity.
Discussions under the heading of the New Economic Context aim to explore opportunities and disruptions to economic growth in the region, as hyper-connectivity and technological innovations offer new ways of connecting businesses and consumers, while environmental and social sustainability will be fundamental pre-conditions for future economic success.
Covering a range of critical topics linked to the New Citizen Context, participants will identify and share potential solutions to pressing societal challenges that require renewed trust in public and private sector institutions, as well as improved dialogue between government and business to address short-term and longer-term challenges.
Many of this year’s discussions will be available on livestream and responses and reactions to these critical discussions are warmly welcomed. Here are five lessons from East Asia on building trust to address some of the region’s most complex issues, from maritime disputes to deforestation:
Learn to trust your neighbours
International conflict is now seen as the biggest threat to global stability, ahead of environmental and economic risks, according to the World Economic Forum’s most recent Global Risks Report. East Asia has not been immune to this risk. While growth in the region continues to be strong, it must not lead to complacency about geopolitical tensions. Among them are friction between China and Southeast Asia over the South China Sea, and difficult relations between China and Japan. Such tensions can have an immediate impact on growth, be it through rising energy prices or trade disputes. After all, China is the largest trading partner for many of its neighbours.
Session to watch: The Geopolitics of Asia’s Energy Supply
Don’t be afraid to cooperate
When regional actors do work together, their collective effort can set off a virtuous cycle of trust and prosperity. A primary example of this is ASEAN, the Association of Southeast Asian Nations. Its leaders aim to launch the ASEAN Economic Community (AEC) by the end of 2015, forming a common market of 10 countries with over 600 billion people. As a region, ASEAN is growing faster than India or China, and integration will fuel growth further by giving foreign and regional investors access to a single market. The plan is to gradually allow for a free movement of people, capital, goods and services, as well as cooperating in areas such as education. As an economic bloc, ASEAN would be the seventh-largest economy in the world, and could be the fourth-largest by 2050 if growth trends continue.
Session to watch: Connecting ASEAN: The Last Mile
Talk to people
What better stage for a conversation about trust than Indonesia?
Indonesia’s recently elected President Joko Widodo, known as Jokowi, personifies building trust. He is the first president in Indonesia’s young democratic history who does not come from the military, political or commercial elite, but rose to power through his success as a mayor, and his popularity with ordinary people. His trademark surprise visits to poor neighbourhoods and street markets, where he asks residents, shoppers and vendors about their concerns, have continued during his presidency. On a visit to cocoa plantations in eastern Sulawesi shortly after his election last year, he squatted on the ground to talk to farmers about boosting their harvests.
Removing the distance between politicians and people can yield concrete, tangible benefits. In the case of Indonesia, President Jokowi was able to remove the government’s fuel subsidy – a difficult reform that many other leaders around the world have avoided, fearing a public backlash. The president explained to his people why the reform was necessary, and how the saved revenues would be invested in education and infrastructure. Crucially, they trusted his message.
Session to watch: The Aspirations of Inspirational Indonesia
Place trust at the centre of economic growth
Trust deficits exist even in successful economies, especially when young people feel their concerns are being ignored. Street protests brought Hong Kong to a standstill, and led to martial law being imposed in Thailand. Growth alone cannot guarantee stability, and may even exacerbate social inequality and polarisation. To create a firm foundation for shared prosperity, trust has to be anchored into the growth story.
Session to watch: Anchoring Trust in East Asia’s New Regionalism
Create a setting where trust can grow
Dialogue has always been at the heart of the World Economic Forum. Bringing different actors together can open the way for positive change. Creating an environment where a multiplicity of stakeholders can engage each other is all the more important since publicly reaching out to an opponent can be a risky move, one that may be seen as a sign of weakness.
Yet after a successful negotiation, everyone walks away stronger. In Indonesia, dialogue was used to halt the destruction of the rainforest through palm oil production. Between environmental activists, slash-and-burn farmers who feared a loss of livelihood, palm oil producers and neighbouring countries such as Singapore and Malaysia who had to cope with the resulting smoke, little compromise seemed possible. Yet out of these disparate interests, the Tropical Forest Alliance 2020 was formed, which aims to end deforestation.
Session to watch: Trust or Bust
In an ever more closely connected world, with challenges that can only be tackled collectively, no country or company can afford to treat the issue of trust lightly. Therefore, I look forward to many enriching, trust-building conversations at this year’s Forum on East Asia – an exciting region that is looking ahead with optimism and energy.
The World Economic Forum on East Asia 2015 will take place in Jakarta, Indonesia, from 19-21 April.
Author: Sushant Palakurthi Rao is Senior Director, Head of Asia Pacific, World Economic Forum
Image: A worker walks on top of wooden boat at Muara Baru port in Jakarta December 8, 2014. REUTERS/Beawiharta