Valdai Club

Over the last two decades, Asia experienced a dramatic economic rise. Its economy was transformed into a key engine of the world economy, fueled by the private sector. But this mechanism is far from perfect.

The participants of the Jakarta Conference gathered for the first session to discuss Asia's socio-economic performance, problems and further development. It was pointed out that the path towards economic development and prosperity is a branchy and divergent one.

Over the last two decades, Asia has been exhibiting a dramatic economic rise. Its economy was transformed into a key engine of the world economy, fueled by the private sector. But this mechanism is far from perfect. One of the properties it lacks is an efficient model of wealth distribution. Societies cannot take advantage of the achieved economic progress. The gap between the rich and the poor is rather wide. Small and medium-sized enterprises are especially vulnerable, their development opportunities are definitely inferior.

But the prospects are not so gloomy in the region. Experts named solutions that can help countries take a turn for the better. Asia requires a more centralized form of development, improved governance and social integration. Cambodia, Laos and Myanmar, for instance, need greater economic assistance. The human sector deserves additional attention as a vital building block of economic progress.

More mastery and skills are needed to start the Asian Century. The participants of the conference outlined two paths of economic development the region may choose: the old path of copying existing products and a new path of creating new ones. When choosing a path, Asia does not want external forces to be the writers of the playbook for its economic development. Such moves often pull Asian countries back.

The Trans-Pacific Partnership (TPP), for instance, is unnatural in its inception and conduct. It bears nothing Asian, the experts claim. The region has already progressed far enough in liberalization, its free trade performance is one of the best in the world. The TPP imposes certain rules on Asian states. It increases the gap between advanced and developing models. Why did Asian countries join the initiative? For political reasons, explained the eхperts at the conference. In any case the TPP is merely a set of large markets ready for cooperation.

China, on the other hand, has sharp contrast with the TPP. China did not block the development of other countries. Pressing on China would only make it grow more rapidly, one of the speakers said.

Russia plays an important role in enforcing security and bolstering the Asian economy. So far, Russia demonstrated eagerness to collaborate with the region. The country has information and communication technologies. Russia and Asia are on the edge of a breakthrough, some participants believe. But effective cooperation requires mutual understanding. Russia, like any other country in the world, needs to understand that Asia is not an integral system, it is composed of various entities. The key components of the Asian development model can be placed together into the so-called Three Ds (development, dignity, democracy).

Another factor making the region unique is its conservative nature. Asia prefers to keep things unaltered, although it understands that the region is yielding to global changes. Asia is ready to take note of the experience of other integration structures, such as the European Union, or use the ASEAN groundwork for integration expansion.

During the session special attention was paid to the development of Indonesia. Over the last 25 years Indonesia has reached impressive prosperity, demonstrating spectacular economic performance. The country has created new forms of economic activity, new levels of education and skills. The number of mobile phones used in Indonesia is about the same as in Russia, which shows the country's high-tech potential. Indonesia is proud of one the largest cinema markets in the world. This is another indicator of rapid development. The country has an open partnership programme, and Russia is welcome to take part there. Both Indonesia and Russia have similar challenges and concerns, they have common path.