US unveils Indo-Pacific strategy amid economic slowdown

From left to right, Thai Foreign Minister Don Pramudwinai, his Indonesian counterpart Retno Marsudi, Indonesian President Joko Widodo and Secretary General of Association of Southeast Asian Nations (ASEAN) Lim Jock Hoi hold hands with other delegates as they pose for photographers during the inauguration ceremony of the new ASEAN Secretariat in Jakarta, Indonesia, Thursday, Aug. 8, 2019. (AP Photo/Dita Alangkara)

WASHINGTON D.C. (Vientiane Times) — A senior official at the U.S. Centre for Strategic and International Studies Asian Economic Strategy Commission has advised developing countries to closely cooperate among them to reduce the impact of the trade war between China and the United States.

The economies of many developing countries are suffering the effects of the ongoing trade conflict between the world’s leading economic powers.

This conflict is one of many reasons that developing countries, including Laos, are faced with higher living costs, inflation and a general economic slowdown. No one knows when China and the U.S. will be able to resolve their problems so that global economic equilibrium is restored.

Senior Vice President of the Centre for Strategic and International Studies (CSIS), Matthew P. Goodman, said the United States was aware of the fact that many countries are concerned about the trade dispute.

Until the situation is normalized, developing countries are advised to formulate their own plans to ensure they can reduce the impacts of the dispute as much as possible.

As well as bolstering productivity, it is essential that developing countries cooperate effectively in the wider fields of trade, economics, tax and business. With regard to Laos, Goodman suggested the country strengthen cooperation with other Asean countries.

According to CSIS Briefs, the need for infrastructure in the Indo-Pacific region is massive, totalling as much as US$50 trillion by 2040.

Despite wide agreement about the importance of increasing investment, there is no consensus about how to get there. The world’s leading and emerging powers, including China, Japan and India, have competing visions for tomorrow’s infrastructure and different models for building it, including China’s Belt and Road Initiative and Japan’s Partnership for Quality Infrastructure.

The United States and Australia have both championed sustainable infrastructure development in the Indo-Pacific. As part of its ‘free and open Indo-Pacific’ strategy, the Trump administration is promoting sustainable investment in the region and infrastructure that is ‘physically secure, financially viable, and socially responsible’.

However, Goodman, said the United States and Australia should coordinate with like-minded countries and development banks to deepen targeted, strategic financing mechanisms.

They should continue to monitor regional infrastructure projects with strategic implications, starting with a workshop with Asean.

Both the United States and Australia are heavily invested in developing Asia. The United States is the largest investor in Asean, with a stock of over US$306 billion in investment by 4,700 companies in the region; it is also the second-largest investor in India.

Australia’s investments in East and South Asia nearly quadrupled between 2007 and 2017, led by projects in Japan and Hong Kong. The stock of investment between Australia and Asean was US$224.4 billion in 2016.

Washington and Canberra can leverage their economic strength and dynamic private sectors to improve investment standards in the region. By helping strengthen regional investment standards, sharing technical knowledge, and cultivating public private partnerships, both countries can offer an alternative to lower-quality investment in the region.

By Xayxana Leukai