International Conference elixir 2013

1. FINANCIAL
REFORMS IN
EMERGING
ECONOMIES WITH
REFERENCE TO
ASIAN COUNTRIES
February 18,
2013

2. Introduction
Developing countries also known as the emerging markets are fast
becoming the driver of global growth.The diversification that emerging
markets provide is they tend to perform differently than developed
markets and have been successful at decoupling from the greater longer
term woes of the mature economies. A modest growth pickup to about 6
percent in 2013 would result mostly from strengthening external
demand, with accommodative monetary stances across the region.
February 18,
2013

3. To sustain economic growth over the medium term and
make growth more inclusive, a diverse policy agenda will
be required in different parts of Asia, ranging from
economic rebalancing to strengthening the sources of
private sector–led investment to reforms in goods,labor
markets.The existing opportunities and challenges from
rapid demographic change have also contributed to the
growth factor of Asian economies.
February 18,
2013

4. Following are some important objectives of this paper :-
• The policy agenda for advanced
economies—and the implications
for Asian economies.
Malaysia
• The virtues and benefits of
further economic cooperation
within Asian economies.
India • Importance of fiscal
consolidation and sustaining
growth in Asian economies.
China
February 18,
2013

5. 1.POLICY AGENDA IN ADVANCED ECONOMIES AND
IMPLICATIONS FOR ASIAN COUNTRIES
• In the midst of global
economy, where momentum
continues to slow,the expected
global growth of 3.3 percent in
2012 and 3.6 percent in 2013 is
expected to slowdown,it is also
spreading in regions that have
previously performed well.
• This year, growth in emerging
Asia fell to its lowest level since
2008—partly from domestic
slowdowns in China and India,
but also because of strong
gusts from storms in the west.
February 18,
2013

6. 2. INCREASED ECONOMIC COOPERATION WITHIN ASIAN
COUNTRIES
Trade integration Financial integration
Asia has already made great strides. More than 90 percent of ASEAN
Over the past decade, trade within cross-border portfolio investment
Asia tripled, and regional trade flows are with advanced economies
among emerging Asia grew even outside Asia. Malaysia, for instance,
faster.With Asian trade, many is a big direct investor in Cambodia,
tributaries flow together as a single Indonesia, Thailand, and
great river. A typical pattern is that Vietnam.Greater regional financial
Asian economies send intermediate integration could open up a host of
goods to China, which assembles new benefits. It can boost domestic
them into final goods for exports. In demand—partly by making it easier
fact, intermediate goods now account for small businesses in countries to
for over 70 percent of all Asian gain access to credit.
exports.
February 18,
2013

7. 3.IMPORTANCE OF FISCAL CONSOLIDATION AND
SUSTAINING GROWTH IN ASIAN ECONOMIES
Country circumstances will also determine the appropriate pace of
fiscal consolidation. Coordinated and collective action by asian
policymakers will also help in particular, by pursuing ongoing
initiatives to maintain and deeper strong regional trade integration.
Automatic stabilizers––that is, automatic tax revenue declines and
spending increases that dampen the impact of the shock––should be
the first line of defense.Calibrating the appropriate near-term
support for growth without fanning inflationary and financial
stability risks is the key near-term challenge for policymakers.
February
18, 2013

8. DIRECTIONS FOR POLICY FRAMING
 There is room to spend more on healthcare and education, which are at
relatively low levels in Asia.
 There is room to cover more people under pension and unemployment
insurance schemes—only 20 percent of the working-age population is
covered in emerging Asia, as opposed to 60 percent in the OECD.
 There is room to raise minimum wages for the poor, which are relatively
low in Asia.Introduction of minimum wage policy should be made
compulsory for all emerging nations in Asia.
 And there is room to improve access to financial markets—right now,
nearly 60 percent of the people in East Asia are excluded from the formal
financial system.
February
18, 2013

9. Conclusion
There is an increasing impetus in different economies to establish an
institutional framework to coordinate the work of different regulatory
agencies and to provide oversight of the future.
This papers attempts to recommends setting up a financial sector
oversight agency in emerging asian economies to redefine the objectives
and avenues of financial development in light of recent events in major
Asian emerging economies.
February 18,
2013

10. Thank You
Abhishek Pande
Faculty
Orange School of Business
February 18,
2013