Emerging economies in Asia will require deep reaching structural reforms in order to avoid stagnation and promote a second wave of growth, according to visiting associate professor from the Lee Kuan Yew School of Public Policy at the National University of Singapore, Razeen Sally.

Drawing a distinction between advanced economies like Japan, Taiwan, Singapore and South Korea on the one hand and emerging economic giants like China and India on the other, Sally noted that growth in emerging economies was largely driven by the increased utilization of resources which had been previously untapped.

“Liberalized economies aren’t necessarily a pre-requisite to catch up growth, but in the transition to more outputlead growth, more difficult reforms are required which at times will go to the core of their political systems. I don’t believe that Asia’s success will be achieved through the kind social engineering that countries like China have employed.”

Sally made these observations during the recently held 4th Gamani Corea Foundation lecture at the Marga Institute.

“For low-income countries in Asia, the emphasis has to be on getting the basics right in order to promote the kind of catch up growth that countries like India, China, Malaysia and Thailand have been enjoying. However, those countries have nearly exhausted the possibility of catch up growth and will therefore need to implement in-depth structural and institutional reforms in order to bring about a second wave of growth.