Thank you Joe Marushack for that introduction, and a special thank you to Alex Feldman for inviting me to address such an amazing gathering.
It is a great pleasure to be here today. I want to congratulate you and thank you for the work you have been doing over the last three decades.
As you all know, I am a child of Southeast Asia. When I was born the region was extremely poor and at the center of major geopolitical tensions.
Today, my home region is one of the most dynamic in the world. It is located in a neighborhood that will likely shape this century like no other.
If measured in comparable prices, China will soon overtake the U.S. as the largest economy. And by 2050 it will constitute a quarter of the world economy. India will compete with the U.S. for second place, and Indonesia – my country - will be about to overtake Japan.
This success inspires others.
I just visited Tanzania and Ethiopia, both countries with high poverty and high growth rates in the last decade. Both are looking towards ASEAN member states like Vietnam or Malaysia to learn from its lessons and copy the region’s successes.
So when we celebrate the U.S.-ASEAN relationship today, I would like us to keep three points in mind that will be critical for our future:
First, the need for more cooperation. Second, the role you, the private sector can play in helping the region achieve its development goals. And finally the importance of sound political leadership.
We are now only 15 months away from the creation of the ASEAN economic community, a much anticipated step.
A seamless economic space with 600 million people can be a powerful engine of growth for the region and the world.
But too many obstacles remain.
Trading with ASEAN is still expensive. For example, the cost of transporting a container from Bangkok or Jakarta to Los Angeles is twice that of shipping it from Shanghai or Seoul.
And the barriers for foreign investments are still the highest in the world. They limit productivity gains and constrain competition.
The new ASEAN economic community can only realize its vision when barriers are truly lowered, not only within the region, but also beyond.
Too many exceptions in opening trade and too many limits on foreign direct investment will undermine the regions goal of being a key part of global supply chains.
Pursuing closer integration therefore requires political leadership that can explain the benefits of cross-border cooperation while cushioning the impact on those that stand to lose in the short-term.
Second, at the World Bank we are focusing on two goals: ending extreme poverty and promoting shared prosperity. Achieving these goals will take both multilateral aid and you, the private sector.
Both people and businesses stand to win when growth is strong and shared broadly. And this is where our focus is at the World Bank.
In Myanmar, a country that only recently emerged from years of military rule, we are working with the new leadership on bringing healthcare and electricity to all.
In Vietnam, we are working with the government to upgrade 360 km of roads in the Delta, boosting the transport of commercial goods by 60%.
Some of the most transformative projects we pursue involve the private sector directly. Like our rural electrification program in Laos which brings electricity to 70% of the population.
The need for infrastructure is so high that no government or multilateral institution like the World Bank, will be able to address it alone. This is where you come in. The private sector.
We need your investments and entrepreneurship to build and manage the roads, the power lines and the utilities so that people can leave poverty behind and businesses can thrive.
Where we see a need for development and growth, you should see opportunity.
Third, we need good governance, both in politics and corporations. We need transparency and a fair tax system. And we need sound leadership that will be critical to address rising inequality.
Fast growing countries in Asia, like countries elsewhere in the past, are experiencing rapid urbanization, rising income inequality and a fundamental reorganization of societies away from traditional structures.
Some rise in inequality may be good for growth, as it provides the incentives for people to strive to succeed.
But World Bank research shows that if inequality starts to affect equity of opportunity, inequality could threaten growth.
Further, high inequality could undermine the political consensus needed to implement policies and reforms that keep growth high.
Leaders, whether in ASEAN or elsewhere, need to care about maintaining an open and competitive society.
To achieve this, countries need competition laws, access to finance, and business regulations with low barriers to entry.
The most difficult challenge for many countries ahead is avoiding state capture by the privileged.
This is where ASEAN leaders can make a difference, even if the political costs are high and the benefits not immediate: by tackling the structure of state-owned companies and by leveling the playing field.
Everybody will benefit, the people of ASEAN and you, the private sector.
I have great hopes and I am optimistic that my region can achieve its goals.
We need strong relationships, like the one we have with this council, to pursue them.
On behalf of a region that has achieved a lot and has much to be proud of I want to thank you for your support, your cooperation, and your friendship.
Thank you.
