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Asia moves a step ahead

Publication Date : 23-12-2013

 

This is the Asian century, or so many books and articles have proclaimed. Many others around the world often look at Asia economically with some envy.

On the other hand, in the wake of the global economic slowdown, some Asian countries are bracing themselves for tough times ahead.

They include countries like India and Indonesia, which have current account deficits and are expected to face difficulties when the United States reduces the pace of its easy money policy.

For China, the era of guaranteed rapid growth of exports to the United States and Europe is over. It is changing direction from export-led to domestic growth, and from investment-based to consumption-based domestic demand.

Economic growth as a goal in itself in Asia is also being challenged on many fronts — by the need for more equitable sharing of benefits and by environmental degradation such as health-threatening air pollution, natural disasters and climate change.

One weakness is that the Asian and the Pacific countries do not have the practice of thinking and working together as one region. There are separate sub-regional organisations such as Asean (for South-East Asia), SAARC (for South Asia) and the Pacific Forum.

But there isn’t an organisation of the developing countries for the whole region. Asean Plus Three and the East Asia Summit come nearest, but these are informal gatherings and even then they cover mainly East Asia.

By contrast, Africa has the African Union with its Commission that unites the various sub-regions. In South America, there is Unasur and most recently, the emergence of Celac (which groups together South and Central America plus the Caribbean countries).

Into the policy-making vacuum for our region has stepped Escap, the United Nations Economic and Social Commission for Asia and the Pacific.

It used to be little noticed. But in recent years, Escap has grown in profile and stature under the leadership of Dr Noeleen Heyzer, a Singaporean with close family ties to Malaysia.

Last week, Escap Ministers took a step forward by adopting a four-pronged programme to link up the countries of West, Central, East and South-East Asia and the Pacific.

The Ministerial conference adopted a Bangkok Declaration on regional economic cooperation and integration in Asia and the Pacific.

Dr Heyzer highlighted the four pillars for regional cooperation — an integrated regional market, seamless connectivity, financial cooperation and regional response to vulnerabilities.

During the opening ceremony, Timor Leste’s Premier Xanana Gusmao pointed out that the context and circumstances of each country are different, which should be taken into account when advocating regional cooperation.

Moreover, the aim should be development for the people, not the benefit of transnational companies or a corrupt global financial elite.

He struck a cautionary tone that the plans for regional integration should result in mutual benefits including for the weaker countries, and should not pry open the economies to powerful economic entities and global financial markets.

Leaders from less developed countries such as Samoa, Laos and Tuvalu stressed the need to give leeway and special treatment for the smaller and weaker countries when negotiating trade agreements, so that they do not get further marginalised.

The Bangkok Declaration was a good blend of four action areas:

> Moving towards forming an integrated market, including bringing down trade barriers (but with special treatment for weaker economies), recognising the importance of migration flows and intra-regional tourism.

> Enhancing financial cooperation, including mobilising Asia’s immense financial resources towards short-term liquidity support (to help countries with foreign exchange problems), trade finance and funds for infrastructure development.

> Increasing cooperation to address shared vulnerabilities and risks, including the issues of food security (through a new regional agriculture network), economic shocks, natural disasters, environment and climate change.

> Developing “seamless connectivity” in the region in the areas of transport (including an Asian Highway Network and a Trans-Asia Railway Network), energy (to be developed through an Asian Pacific Energy Forum) and information and communications technology.

To avoid this Declaration being just another document at just another meeting, the Ministers agreed to a follow-up plan. This includes setting up four expert working groups (to propose actions for each of the issues), convening a second Ministerial meeting on regional cooperation in 2015 and having an inter-governmental process open to all Escap member states to receive the expert group reports and to prepare for the Ministerial meeting.

The understanding is that there will be a Ministerial conference every two years on regional cooperation and integration to review progress on the actions in the four areas.

With last week’s Bangkok conference, Escap is set to get concrete action going on Asian-Pacific regional integration and cooperation.

Pursuing this cooperation agenda is “an important step towards realising a broad long-term vision of an economic community of Asia and the Pacific,” according to the Bangkok Declaration.

Malaysia’s delegation was led by Deputy International Trade Minister Datuk Hamim Samuri, who described the conference as very useful, stressed the need for “action with concrete outcomes” and called on the four expert groups to come up with solid deliverables.

At the final session, the conference chairperson, Samoa’s Finance Minister Faumumina Tiatia Liuga said: “For us to be stronger, to be the Number One region in the world, we need to support each other and help the weakest.”

It remains to be seen whether this conference lives up to its promise of sparking a process for Asia-Pacific countries to talk with one another and generate region-wide cooperation in concrete ways in finance, connectivity and addressing vulnerabilities.

If it does, then policy-making in the region will become more mature, which is what’s needed in this complex, globalised world with its many big challenges in the near future.

 

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