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The conference on the Global Economic Crisis: Impacts and Implications for Industrial Restructuring in Asia was held in Tainan, Republic of China, 19−20 August 2009. It was hosted by National Cheng Kung University (NCKU) and jointly organized by the APO, Asian Development Bank Institute (ADBI), and China Productivity Center (CPC). A total of 160 participants from more than 15 countries attended the conference including government officials, university professors, industry experts, and university students.
The aim of the conference was to develop a platform for sharing regional experiences and understanding the economic restructuring occurring in the Asia-Pacific in the current economic climate. Today, all economies are confronting the fallout from the global economic crisis. Some countries are already showing signs of recovery, while others are still in the midst of the crisis. Despite the differing levels of impact among nations, participants agreed on the importance of preparing for economic recovery and future growth.
The conference commenced with opening remarks by President Michael M.C. Lai, National Cheng Kung University, Tainan City Mayor Tain-Tsair Hsu, Republic of China, and Director Mukesh Bhattarai, Research & Planning Department, APO. They were followed by Professor Jagdish N. Bhagwati, Economics Department, Columbia University, USA, who gave the keynote speech titled “Capitalism After the Crisis: Myths and Fallacies.”
Professor Bhagwati is a foremost international trade economist, widely regarded as a future Nobel Prize laureate. He pointed out that the current financial crisis had been caused by information asymmetry. He mentioned that it was important to clarify the distinction between innovations in financial products and nonfinancial products. Innovation in financial products can lead to “destructive creation” while nonfinancial products may contribute to “creative destruction.” Professor Bhagwati thinks that the myth of the market should not overrule moral considerations. The current form of capitalism can function better if family and community values are strengthened and healthcare and education improved.
In the context of industrial restructuring, Conference Chair Professor Wen-jen Hsieh, National Cheng Kung University, pointed out that the impact of the global financial crisis was most significant in export-oriented economies. On the other hand, those who have strong domestic markets managed to survive. Professor Hsieh also informed the audience that the service sector had become a mainstream industry in most developed economies. For national industrial restructuring, developing innovative services through the integration of manufacturing and service operations could be an area in which to develop competitive advantages.
In comparison with the Asian financial crisis of 1997–1998, the current financial crisis is broader, deeper, and more complex. The analysis presented during the conference indicated that developing a more efficient service sector could promote domestic demand and have positive effects on economic growth. A shift toward services could lead to an increase in aggregate productivity and employment. As in the Indian economy, where the service sector contributes more than 80% to the annual growth rate, the impact of the global economic crisis is relatively less severe when a country is less dependent on exports and a sizeable contribution to GDP comes from services.
This conference was held immediately after the expert group meeting for the APO research project on the Impact of the Global Financial Crisis on SMEs. The expert group benefited from the inputs of the conference, and several of the national experts attended the conference as speakers or discussants.