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Asia’s economies should work to close regulatory gaps and increase access to technology, according to International Monetary Fund (IMF) managing director Christine Lagarde.
Lagarde, speaking at the Boao Forum in Hainan, China, said that Asia contributes two-thirds of global growth, and congratulated Chinese president Xi Jinping for committing to opening up China’s business sectors, including insurance and banking.
Now she has named three gaps that need to be closed in order to further hasten Asia’s development, first of which is the gap in accessing digital financial services.
“Indeed, the digital gap in Asia is smaller than almost anywhere else in the world,” Lagarde said. “The gap can be closed even further, including through policies that enable more women to access digital financial services. IMF analysis shows that, if the gap between the least financially inclusive country in Asia and the median country was narrowed, national GDP per capita could be increased by a full percentage point.”
The second gap is the regulatory gap. According to Lagarde, the rapid rise of financial technology (fintech) in Asia has exposed gaps in regulations that were mostly made in a pre-digital area. She added that if these gaps are not closed, it could lead to systemic risks both domestically and internationally.
The third gap she identified was the innovation gap.
“New IMF research shows not only the contribution of trade to growth, but it identifies how trade facilitates the sharing of technology across borders, especially in emerging markets,” she said. “Until recently much of the creation of new technology was concentrated in a small number of advanced economies. But that is changing.”
By closing that gap, Lagarde believes that Asia will transform from being a net importer of innovation into an exporter of innovative solutions for the benefit of the global community.
