BANGKOK, October 12 — Asia’s future economic success hinges on deliberate policy choices, senior policymakers concluded at the IMF book launch in Bangkok on Monday, October 12, 2026, echoing the region’s past rise driven by such decisions. The panel, which included former central bank chiefs and India’s chief economic adviser, identified ageing populations, artificial intelligence, and geopolitical trade fragmentation as the key challenges shaping Asia’s prospects.
Policymakers viewed AI as a potential solution to offset economic drag from ageing through productivity gains but warned of risks like job displacement and inequality, requiring policies on skills investment, competition, and guardrails. A key recommendation to counter global fragmentation was deepening intra-regional trade within Asia, which could provide a significant boost to regional economies.
The discussion followed the launch of the IMF’s flagship book, ‘Shaping the Future of Asia: Opportunities and Challenges,’ produced by the IMF’s Asia and Pacific Department. Nigel Clarke, IMF Deputy Managing Director, stated Asia’s transformation was ‘a result of policy choice,’ citing shifts from agriculture to manufacturing and services, deep global supply chain integration, heavy investment averaging 27% of GDP, and a demographic dividend that brought over a billion people into the workforce.
He noted Asia now accounts for 68% of world growth, up from about a quarter in 1990, and said the 1997 Asian financial crisis acted as a catalyst for reform. Changyong Rhee, former Bank of Korea governor, emphasized governance as critical to South Korea’s early success, describing the 1997 crisis as a ‘hidden blessing’ that forced a shift from state-led to private-sector-led growth, and urged the IMF to maintain focus on governance in surveillance.
Veerathai Santiprabhob, former Bank of Thailand governor, credited Thailand’s rise to export-oriented policies, infrastructure investment like the Eastern Seaboard industrial hub, and strong technocratic institutions, noting the country avoided another crisis since 1997 and that universal health care and education helped spread gains. V. Anantha Nageswaran, India’s chief economic adviser, traced India’s performance to investment in higher education, 1990s liberalisation, and recent public investment, insolvency code, national goods and services tax, and digital public infrastructure, acknowledging ‘serendipitous factors’ like the Y2K software scare played a part.
On AI, Clarke said AI-driven productivity gains could ‘insulate or neutralise’ demographic drag with proper policies. Rhee cautioned that Korea’s semiconductor ‘super cycle’ showed nominal growth of 21% in the first half of 2026, with Samsung and SK Hynix accounting for around half of the stock market’s capitalisation and exports, urging use of windfall to tackle structural issues like Seoul-area population concentration linked to housing, education costs, and falling fertility, and warned past tech revolutions took 20–30 years for productivity gains, leaving Korea vulnerable to market correction.
Veerathai warned AI could widen gaps between firm sizes and technology access, calling for priority in low-productivity sectors—agriculture, education, public services—and SMEs, with governments making job creation a primary objective, noting workers aged 45–60 could be made redundant easily. Nageswaran argued India’s size and diversity required differentiated state policies, with advanced manufacturing in richer states and labour-intensive manufacturing and services elsewhere, supported by trade deals.
Looking ahead, policymakers stressed that effective implementation of these recommendations will be crucial for sustaining Asia’s growth trajectory amid evolving global headwinds.
