Conclusions and Policy Suggestions

Summary

Participants felt that the crisis has a significant impact on the region, and ASEAN needs to have a better coordinated approach if it has to weather the storm. This has to be in the form of both regulatory reform of the financial sector, with more oversight by the central banks, and policy actions to kick-start growth and employment as well as sustain them through the recovery stage.

The region in particular has to remember that the developed countries and regions like the United States and the EU will take a long time to heal the scars of the crisis, notwithstanding the “green shoots” of recovery that are visible today. Hence, while export-led growth policies have served the region well, governments will now have to think of policies that are oriented more towards domestic or regional markets. This could take the form of more spending on infrastructure development, among others. Anticipating the immediate future and responses is thus crucial for ASEAN. The right actions will ensure that capital continues to flow into the region, both as direct investments and into the financial markets, signalling confidence in the region's governance.

One of the main findings of this conference is that the notion of “security” is not definite, and can be ambiguous at times. Countries in the region have frequently explained away the source of insecurity in political and military terms, overlooking other aspects of regional “insecurities”. The current economic crisis, considered as a new kind of insecurity, has hit the countries in the region hard. Many initially failed to respond coherently to the crisis, let alone attempt to really understand the nature of the crisis. Hence, future treatment of the issue of regional security should be reconceptualized so that it could anticipate the possibility of future threats that may emerge from the economic realm.

As ASEAN countries continue to grapple with the impact of the crisis, the region must also be ready to implement measures that will minimize the negative impact of the crisis on the most vulnerable groups. ASEAN has not fully addressed the social — particularly the poverty — implications of the current crisis. This is a cause for concern, as the region has recently seen job losses in critical sectors.