On June 4, the International Monetary Fund (IMF) and Singapore Management University (SMU) sponsored a panel discussion in Singapore on the new IMF book “Frontier and Developing Asia – The Next Generation of Emerging Markets.”

Frontier economies, in Asia and beyond, are in the spotlight for their potential to achieve and sustain substantial economic and development gains. Emerging market economies have held center stage for years, but as growth in some slows, and others face what is frequently called the middle-income trap, this new “frontier” group is generating considerable interest among development, investment, and academic communities and policymakers.

Mr. Alfred Schipke, the book’s editor and IMF Senior Resident Representative in China, stressed the growing importance of Asia’s frontier economies for both the region and the world. Mr. Schipke emphasized that Frontier Asia needs to continue with its economic transformation to achieve sustainable growth, ensure that growth is inclusive, and significantly strengthen policy frameworks. This transformation will be important to improve living standards and minimize the risk of set-backs and possible crises down the road.

Speakers of today’s panel discussion were of the view that the prospects are excellent for many frontier Asian economies to become the next generation of emerging markets and join the group of middle-income countries. However, these countries will have to avoid complacency and accelerate reforms to sustain high growth and make growth more inclusive. Panelists also offered caution based on the experience of emerging market economies. In particular, as Frontier Asian economies become more globally integrated, policymakers will have to focus increasingly on how to manage risks and vulnerabilities. Confronting this challenge will require proper sequencing of reforms, guarding against risks of excessive growth and credit bubbles, and upgrading financial sector regulatory and supervisory capacity to keep up with financial sector deepening.

The panel included Mr. Kim Song Tan, Professor of Economics and Director of the Masters of Applied Economics Program at SMU; Mr. Lam Keong Yeoh, Private Economic Consultant and Adjunct Professor at the Lee Kuan Yew School of Public Policy; Mr. Will Oswald, Global Head of FICC Research at Standard Chartered Bank; and Mr. Mangal Goswami, Deputy Director of the IMF-Singapore Regional Training Institute (STI). The discussion was chaired by Ms. Julie Kozack, Director of the STI. Representatives from think tanks, government agencies, academia, the private sector, and media attended the book launch.