Dr Jim Walker of Asianomics, a witty Scottish economist based in Hong Kong who speaks with a semi-thick Scot accent, delivered an insightful presentation regarding the future prospects of Southeast Asian countries, and Singapore’s role in this development.
While he offered his positive views on this part of the world, he isn’t as sanguine on the North and East Asian countries as well as the developed economies of Europe and the US. Dr Walker brought forth the demographic issues across the world, which is a theme that everyone is probably very familiar with.
However, one major point that Dr Walker hammered on is the looming pensions crisis in the Western developed world, whereby he sees a potential calamity unfolding as social liabilities are increasingly unable to be funded and that many people are still slow to realise it.
As the reality unfolds and sinks in, and once people start to realise that what is supposedly granted and ‘a-given’ becomes unavailable, Dr Walker suggests that there could be a ‘war’ between the younger population and the older generation, which could cause huge/sweeping political and social changes.
This also adds on to the inevitable pressure that the younger demographic is in in order to support more elderly in societies with an aging demographic… According to Dr Walker, this would lead to sweeping and a highly unpredictable future which policy-makers have to grapple with.
He opined that pensions in the West will be desperate for higher returns from countries that have higher growth rates with positive structural demographic tailwinds, and that China’s “One Belt, One Road” mega-project is precisely the Chinese policy-maker’s version of capturing these structural themes as they deal with an aging demographic themselves.
Dr Walker’s points also got me thinking about how societies could be influenced by the movement of humans (immigration) and also the forces that drive the movement of human capital.
I happened to be up in Georgetown, Penang a month ago, and had to privilege to catch up with its developments. For those of you who have never been or heard of Penang before, it’s an island off Malaysia in Southeast Asia that is known for its tasty local cuisine and unique sights and scenes. It is about an hour and a half by air from where I am in Singapore, and it’s near Thailand’s southern border.
Established by the British as a trading port and naval base during the colonial times, Penang is now known as an eclectic melting pot of cultures and a popular tourist attraction among locals and foreigners. In Georgetown, the old buildings have been kept and in some instances, refurbished, with many of them turned into hipster cafes, chill bars and motels. With a mix of the old and new, its an interesting town for a visit!
With a local population that consists of Chinese, Malays, Indians and Eurasians, it slightly reminds me of Singapore (but we are a lot more built up). The local cuisine is widely varied, and extremely savoury and scrumptious! My fellow Singaporeans can certainly attest to this statement – there are many Straits dishes throughout the region that have the same name but they all have their own unique differences (wow!)
Tourism drives the local economy in Penang, and with the relatively weak Malaysian Ringgit (MYR) over the past 2 years, a boom can clearly be seen in the town. I noticed a spur in mid-tier and upper-tier residential real estate development to the north of Georgetown, towards the coast. The locals tell me that many of these projects are done by both local and foreign developers in order to cater to foreign demand.
It got me thinking about how societies could change just by the movement of people, and how those people are influenced by economic forces (in this case, plausibly the weak MYR?).
In the future, its highly possible that we move to a more fragmented and multi-polar world, and that the most influential cities will turn into mega-cities, drawing the brightest and hungriest of people across the world. These so-called mega-cities could even be more influential than medium-sized countries, commanding their own political power on the global arena and mustering huge economic prowess via the concentration of intellectual capital.
Technological advancements will only exacerbate this secular trend… unless of course, the world sinks back to the stone age if the age of cooperation turns ugly and humanity reverts back to our savage instincts of violence and war.