Asia must tackle structural bottlenecks: BOT Governor
Published on Friday, 19 July 2013 16:34
Source: The Nation
Bank of Thailand Governor Prasarn Trairatvorakul warned that before Asian nations are moving forward, they need to address structural bottlenecks to ensure sustainable development.
At The Nation's 43rd Anniversary International Conference on Friday, in his opening speech on "Asian and Thai Economies in a Volatile World", Prasarn said that the apparent slowdown in Asia, despite gradual improvement of the advanced economies, lends support to the idea that Asia also has its own structural bottleneck issues to deal with.
"The time is ripe for all parties involved to look beyond short-term fluctuations and give serious consideration to longer-term structural issues that are holding back Asian potential growth. This is the second topic of my talk today: what can Asia do to sustain its high pace of growth in the post-crisis world?"
He said that due to the global financial crisis, policy makers in emerging countries have been focused on demand-side management, through monetary or fiscal policy stimulus. But boosting demand alone could only get us thus far. The real lift of potential growth of the economy must essentially come from supply-side progress. This refers to either the more abundance or the better use of capital and labor inputs in the economy. Although Asia's potential growth remains higher than in other regions, recent studies pointed to a possible reduction in trend growth since the 2008 financial crisis.
"Two common drags to long-term growth among emerging Asia are the labour shortage and the decline in productivity growth," he said.
"I would like to urge that, in searching for labor market solution, attention must also be paid to the problems of the wage structure, since at the going wage, price mechanism and its signaling function do not work efficiently enough to clear the labor market to eliminate this skill mismatch," he said.
Source: http://www.news.myanmaronlinecentre.com/2013/07/20/asia-must-tackle-structural-bottlenecks-bot-governor/
No comments:
Post a Comment