Asian Financial Forum Hong Kong – Economic/Financial Outlook for 2012

News article | January 26, 2012

2200 experts gathered for the fifth Asian Financial Forum (AFF) that was held in Hong Kong on 16-17 January.

AFF is the largest financial forum in Asia. Theme of the AFF, Asia Driving Sustainable Economic Growth, reflects Asian economic confidence. But serious risks remain in the world economy. There were many concerns about the EU, but also about the US prospects for 2012. These external developments will have a big impact on Asian markets.

There was agreement at the AFF that sovereign debts are a problem, but not so much as the absence of growth. This is a problem especially within the EU.

Asian economic confidence
Speakers such as Li Wei, President Development Research Centre of State Council PRC, and Takehiko Nakao, Vice Minister of Finance for International Affairs Japan, stated that Asia should not rely on the West for a way out of the current financial-economic uncertainties. Asia has to be focused on Asia, was their message. Intra-Asia trade should be promoted as well as trade settlement in regional currencies.

Joseph Stiglitz
Nobel laureate Stiglitz was critical of the Western financial centres in the run up to the 2008 crisis. They failed on risk management and their investments were focused on short term profits, rather than on long term (social) benefits. Asia, with plenty of reserves, should start facilitating their own funds. They should no longer rely on London and New York, according to Stiglitz.

Stiglitz expressed the need for more financial regulation, leading to greater stability and less crises. Costs of financial regulations are minor to the losses caused by deregulation, states Stiglitz. Emerging markets already learned this lesson in the 1997 crisis. The West has yet to learn this lesson.

Stiglitz was critical of EU austerity measures. Budget cuts only accentuate the economic downturn; economic reforms and production growth are needed in Europe.

Dutch participation at the AFF 2013
There was no Dutch presence at the AFF. Dutch participation is arguable considering the ambition of the Netherlands to become the EU destination for (regional) headquarters and attracting more Chinese/Asian investments, which will grow significantly over the coming 5-10 years, according to the market.

Participation in the 2013 AFF will create significant exposure for the Dutch financial sector to Asian markets and economic and financial experts in the region. Specialists point out that you need a healthy, viable and reputable financial sector to absorb (Asian) investments. Dutch participation at the 2013 AFF could contribute to this.