WORLD VIEW:Growth in dynamic Asian region can help to avoid double-dip international recession, writes PAUL GILLESPIE
‘ASIA’S TIME has come. No one can doubt that Asia’s economic performance will continue to grow in importance.” Dominique Strauss-Kahn, managing director of the International Monetary Fund made this remark at a meeting in Daejeon, South Korea this week on the region’s economy. His pledge to increase Asian voting rights in the IMF bore it out.
So did his apology for the policy mistakes made by the IMF in handling the Asian financial crisis of 1997-98. Asian growth at 7.75 per cent will be key to avoiding a double-dip international recession, he said.
These significant acknowledgments of Asia’s importance draw attention to its changing role. Meetings such as this one, held to prepare for South Korea’s hosting of the G20 summit next November, bring its political leaders and policy elites together as never before.
This helps them construct a new unity of purpose which will in time affect the balance of power between world regions. Economic issues certainly draw Asian states together, even while political and security tensions between them persist.
If Asia’s time has come, we should be aware of how recently this is seen inside and outside the region and then how much its own definition and boundaries are still being contested.
Europeans should not assume Asian economic and political integration is proceeding similarly to the EU’s, much less to develop what Irish-Australian scholar Philomena Murray calls an EU “snobbery” about its comparative underdevelopment.
Research suggests that economic regionalisation and political regionalism in Asia are more contingent on global developments than elsewhere. This is because of the powerful external linkages in exports, security alliances and political relations with the US especially.
Such links are competitive between Asian states as China, India, Japan and the region’s southeast jostle for position and allies. As a result, the thin gruel of their partnerships is evolving into a confusing alphabet soup of varying organisations. Commentators say this will end up in a noodle bowl or lattice network rather than a coherent supranational structure like the EU’s.
Asian states are not passive recipients of globalisation or the associated neoliberal Washington consensus pushed by the IMF since the 1980s. They adapt rather than adopt such models of development to their own needs in what another scholar of the region, Amitav Acharya, calls a “constitutive localisation” of world trends.
Just as southeast Asian cultures responded to Hindu and Buddhist influences from India and China by creating their own art forms and civilisations, they bring their own political cultures of consensus and non-interference with sovereignty to bear on their regional co-operation.
Acharya credits the Association of Southeast Asian States (Asean) with several major achievements in its 43-year history, having avoided wars between its members and provided the essential framework for China’s new relationship with them.
This was achieved after the 1997-8 financial crisis. Singapore analyst Kishore Mahbubani points out that during the current crisis, US and European policymakers – and the IMF – “are doing the opposite of what they advised Asian policymakers to do in 1997-98: do not rescue failing banks; raise interest rates, balance your budget”.
The Asians learned valuable lessons then: “Do not liberalise the financial sector too quickly, borrow in moderation, save in earnest, take care of the real economy, invest in productivity, focus on education.”
Asean+3 (APT) was created to bring China, South Korea and Japan into a new political relationship with southeast Asia.
Together they developed new mechanisms on financial co-operation; currency swaps; regional trade agreements; disaster management; transborder crime; tourism; energy; avian flu; atmospheric pollution and the environment.
Top national officials meet some 700 times a year and there is evidence that some common identity is evolving – if not among their populations. An ambitious programme of development by 2015 and 2020 is under way.
Critics say a lot of this is process not progress; weak because it lacks institutions and privileges consensus; in practice makes economic, financial and trade relations suboptimal compared to other regions and that future plans lack precision and operational deadlines.
The alphabet soup of Asian regionalism reveals profound disagreement on its boundaries, identities and relationships with the rest of the world. Japan and China jostle about whether to include India, Australia and New Zealand in regional forums – Asean+6. The East Asian Summit includes them. Singapore and Indonesia want to include the US and Russia in a regular consultative dialogue (Asean+8).
China prefers a more exclusive club, which others resist to balance its power. India finds its new policy of eastern regional engagement frustrated by Chinese initiatives. And the US links a stronger bilateral relationship with China to its declining economic hegemony and its continuing military superpowerdom in the Pacific.
Next October’s Asia-Europe summit gives the EU an opportunity to re-engage with this dynamic region. It is an exciting, if uncertain, period of transition towards a more multipolar world.