BANDAR SERI BEGAWAN – Southeast Asian leaders vowed to uphold multilateralism and integration at a meeting in Bali on Thursday, as trade tensions between the United States and China continue to threaten global economic growth.
The leaders of the 10-member Association of Southeast Asian Nations (ASEAN) bloc met amid the week-long series of meetings held by the International Monetary Fund (IMF) and World Bank on the Indonesian resort island, with talk of rising protectionism taking centre stage.
Speaking at the gathering, His Majesty Sultan Haji Hassanal Bolkiah of Brunei said it was important for ASEAN to remain committed to the values of open trade and economic integration.
There is a trend of protectionism and anti-globalisation, volatility in commodity and financial markets as well as challenges from the rapid advancement of technology, he said during the ASEAN leaders gathering.
“These challenges require collaborative response from ASEAN and also the support of international organisations such as the IMF, the United Nations, and the World Bank.”
Brunei’s monarch also urged greater collaboration with regional institutions such as the Asian Infrastructure Investment Bank and Asian Development Bank to help ASEAN integrate its economies and develop infrastructure as it moves towards realising a single market for goods and services.
By supporting economic integration, it can create a vibrant economic environment that benefits from free, open and fair trade in the region, and at the same time, enhance the competitiveness of all ASEAN member states, His Majesty said.
Eight out of 10 ASEAN countries have outperformed growth projections, driven by highly-diversified economies and the presence of dynamic companies, according to a a report released by the McKinsey Global Institute.
The sultan added that Brunei aims to mirror these goals by adopting pro-investment policies, streamlining processes, and strengthening legal and tax structures.
He also welcomed any assistance in the country’s national endeavours, including the creation of more opportunities for the private sector.
His Majesty stressed that the support of the United Nations, IMF and World Bank are important in ensuring ASEAN’s success, as they work together as partners to ensure that Southeast Asia remains a region of peace and sustainable growth and development.
Ahead of the Bali gathering, the IMF painted a cautious picture for the near future, reducing its global growth forecast down 0.2 percent to 3.7 percent for 2018 and 2019 — citing trade tensions, protectionism and rising debt levels as the main causes.
It is the first time the fund has cut its forecast in more than two years.
Tensions have soared in recent months with Donald Trump’s administration rolling out billions of dollars in tariffs against China in a bid to tackle its trade deficit and rein in what Washington views as unacceptable trade practices by the Asian giant.
China has responded in kind with its own barrage of levies, rattling nerves especially among other Asian economies and already vulnerable countries like Argentina, Turkey and Brazil.
The IMF said tit-for-tat tariffs and rising debt levels could dent China and the US — and leave developing economies especially vulnerable to sudden stresses.
IMF chief Christine Lagarde called on world leaders to fix global trade systems instead of trying to tear them down in a rebuke to nationalist politicians pushing tariffs and protectionism.
“It’s tempting to be a bit depressed about this perspective but I’m actually hopeful because there is a clear appetite to improve and expand trade,” she said. “We need to work together to de-escalate and resolve the current trade disputes.”
Lagarde’s warnings were echoed by OECD General Secretary Angel Gurria, who said trade tensions had already begun to impact commerce since 2017.
“This year the growth doesn’t look so good, what is different, is the trade, the tensions, protectionism, the tit-for-tat, the retaliations,” Gurria said.
— Additional reporting by AFP