DAVOS – While the economic dynamism in the Indo-Pacific is encouraging, the region will need to grapple with the twin challenges of demography and climate change, delegates heard at a panel discussion at the World Economic Forum in Davos, Switzerland.
“For the last few decades, this region has accounted for half the global GDP growth, half the manufacturing growth, half the growth in trade, and almost half of all research and development spending, as well as half of foreign direct investment,” said Mr Michael Froman, president of the American think-tank Council of Foreign Relations, during the discussion on Jan 17, drawing attention to the significant role that the region plays globally.
But the Indo-Pacific’s dynamism does not mean it has no problems of its own, he added.
Many countries in the region face demographic challenges. While the region accounts for half the growth in working-age adults, many Indo-Pacific countries, including Japan and China, have ageing populations, Mr Froman said.
A paper published by Georgetown Security Studies Review in January 2023 noted that current demographic shifts in the Indo-Pacific will have far-reaching impacts on regional security and global economic dynamics.
As for climate challenges, an overwhelming share of global emissions growth comes from this region, and some of the most vulnerable countries – the island nations in the Pacific – are struggling with the fallout from climate change.
The United States has made it clear that it is a Pacific nation and remains committed to the region, even as it maintains alliances with Europe and strong engagements with the rest of the world, including the Middle East and elsewhere, Mr Froman said.
He referenced US President Joe Biden’s meeting leaders of the Indo-Pacific Economic Framework for Prosperity (IPEF) in San Francisco in November 2023, in support of his point. During that meeting, an agreement was signed on supply chain resilience and diversification in a move seen as a bid to reduce dependence on China.
While the Indo-Pacific as a concept has existed for some time, it took centre stage in 2022 when Mr Biden launched the IPEF in Tokyo with a dozen partners: Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam.
Together, they accounted for roughly 40 per cent of the world’s GDP. Fiji joined as IPEF’s 14th member in May 2023.
Mr Froman said there has been more of a consensus within the region on the nature of the China challenge, which would have a bearing on geopolitical equations in time to come.
“Rather than asking countries to choose one or the other, we are all getting used to a world in which there’s not a China bloc, and there’s not a US bloc in the Indo-Pacific; but, in fact, it’s more polyamorous,” he said.
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