2025 ADBI Annual Conference Day 3 (Part 5/6): Harnessing Incentives for Economic Cooperation...

Why It Matters

Aligning incentives around clean‑tech, digitalization and inclusive soft‑infrastructure can sustain Asia’s growth trajectory while countering protectionism and the middle‑income trap.

Key Takeaways

• Economic convergence in Asia-Pacific has slowed dramatically since 2010.
• Labor productivity growth fell after financial crisis and pandemic.
• Clean‑technology manufacturing offers Asia a high‑value, inclusive growth path.
• Non‑binding APEC “pathfinder” initiatives enable sensitive cooperation without enforcement.
• Inclusive, people‑centered paradigm and soft‑infrastructure connectivity counter rising protectionism.

Summary

The final panel of the 2025 ADBI Annual Conference examined how to harness incentives for workable economic cooperation and integration across Asia. Chaired by Professor Shiro Armstrong, the discussion brought together senior officials from ESCAP, APEC, Pakistan’s financial sector and academia to diagnose the region’s structural headwinds and explore pragmatic policy levers.

Panelists highlighted three internal challenges: a decelerating convergence rate—less than half of developing Asia‑Pacific economies narrowed the per‑capita income gap with the United States between 2010 and 2024, a slowdown in labor‑productivity growth after the 2008 crisis and COVID‑19, and the looming middle‑income trap as countries outgrow traditional growth engines. Externally, the deepening “smile‑curve” squeezes value‑added opportunities for labor‑intensive exporters, while rising protectionism erodes the multilateral trade order.

Lin Yang underscored that clean‑technology manufacturing and digitalization, especially AI‑driven translation, can create new high‑value sectors and reduce trade barriers. Carlos Kuryama cited APEC’s non‑binding, voluntary “pathfinder” initiatives—such as the business‑travel card—to demonstrate how sensitive cooperation can progress without formal dispute‑settlement mechanisms. Professor Peter Dell advocated an inclusive, people‑centered development paradigm, proposing balanced aspirations for advanced and developing economies, stronger social‑security nets, and a 2.0 soft‑infrastructure connectivity framework that harmonizes standards, certifications and digital networks.

The panel concluded that policymakers must align incentives through state‑private partnerships, invest in clean‑tech and digital infrastructure, and design soft‑connectivity that lowers non‑tariff barriers. Doing so will not only mitigate protectionist pressures but also unlock sustainable, high‑income growth for the region’s emerging economies.

Original Description

Panel Discussion IV:

Harnessing incentives for workable economic cooperation and

integration

Moderator: Shiro Armstrong, Professor, Australian National University

Panelists:

Peter Drysdale, Emeritus Professor of Economics, Australian National University

Carlos Kuriyama, Director, Policy Support Unit, Asia-Pacific Economic Cooperation (APEC)

Lin Yang, Deputy Executive Secretary, Economic and Social Commission for Asia and the Pacific (ESCAP)

Shamshad Akhtar, Chairperson and Independent Director, Pakistan Stock

Exchange