ASEAN countries need to embrace new growth models that put a greater emphasis on domestic demand, regional trade and economic diversification and prepare for technological changes such as increased factory automation, artificial intelligence, biotechnology, new financial technologies and digital currencies, said IMF Managing Director Christine Lagarde at IMF conference in Jakarta on Tuesday.
She quoted a McKinsey study, saying that 60% of today’s jobs comprise some tasks that will soon be automated. “So we all need to think about the future of work,” said Lagarde. “Managing this transition will be a major part of the answer to creating opportunities for all people. There was no single approach, and many countries will forge their own paths.”
She highlighted Indonesia’s Go-Jek.“A good example is Go-Jek, which has transformed itself from a ride-hailing app into a platform for mobile payments and many other services, Lagarde noted. “The goal must be to harness this digital revolution in the best possible way—by improving digital infrastructures and by making education systems fit for the future.”
In addition, she cautioned policymakers in the region to keep taps on financial stability and volatile capital flows.
“While ASEAN countries were preparing for higher interest rates in advanced economies such as the United States and Europe, policymakers need to stay vigilant about its effect on financial stability and volatile capital flows, “ she said.
"We know this will have spillover effects across the world. We have known for some time that it's coming," Lagarde said. "It remains uncertain how this transition is going to affect other countries, companies, jobs, incomes."
She also cautioned that while the global economic growth is broad-based, the landscape is shifting with heightened risks of trade disputes, monetary policy normalization, and technological change.
IMF estimates that global economic growth will hit 3.9% in 2018 and 2019.