Unit­ing for an Asian cen­tury

The Myanmar Times - - News - LEE JONG-WHA news­room@mm­times.com

THERE is no ques­tion that Asia’s stand­ing in the global econ­omy is stronger than ever. The re­gion now pro­duces about 40 per­cent of the world’s GDP, mea­sured according to pur­chas­ing power par­ity. Dur­ing the re­cent eco­nomic cri­sis, Asia ac­counted for more than half of global GDP growth. Add to that a mas­sive pop­u­la­tion and grow­ing po­lit­i­cal in­flu­ence, and Asia fi­nally ap­pears ready to lead on a world stage long dom­i­nated by the West.

But it is too early to open the cham­pagne. The United States and Europe main­tain an ad­van­tage, in terms of global strate­gic in­flu­ence, while Asian coun­tries are fac­ing ma­jor po­lit­i­cal, eco­nomic and se­cu­rity chal­lenges.

In fact, Asia’s growth mo­men­tum is de­clin­ing. China is work­ing over­time to achieve an eco­nomic soft land­ing, fol­low­ing decades of break­neck ex­pan­sion. Ja­pan is pre­oc­cu­pied with es­cap­ing slow growth and cop­ing with pop­u­la­tion age­ing. Asia’s other eco­nomic pow­er­houses – In­dia, Indonesia and South Korea – each face their own set of eco­nomic and po­lit­i­cal prob­lems. Across the re­gion, ris­ing in­come in­equal­ity, fi­nan­cial in­sta­bil­ity and en­vi­ron­men­tal degra­da­tion are ham­per­ing de­vel­op­ment.

More prob­lem­atic, de­spite be­ing deeply in­ter­de­pen­dent, the re­gion’s coun­tries strug­gle to act col­lec­tively. The per­sis­tence of power ri­val­ries, historical re­sent­ments and ter­ri­to­rial dis­putes, to­gether with pro­nounced dis­par­i­ties in eco­nomic and mil­i­tary might, cre­ate sub­stan­tial ob­sta­cles to unity. A re­cent surge in co­er­cive be­hav­iour by China, a na­tion­al­ist re­vival in In­dia and a shift to­ward con­ser­vatism in Ja­pan have ex­ac­er­bated th­ese chal­lenges.

But, at a time when Western coun­tries are moving to­ward iso­la­tion­ism – ex­em­pli­fied by the Brexit vote in the United Kingdom and the elec­tion of Don­ald Trump as US pres­i­dent – in­tra-re­gional trade and in­vest­ment are more im­por­tant than ever. Be­yond the eco­nomic ben­e­fits, in­te­gra­tion would yield im­por­tant po­lit­i­cal ben­e­fits, with an in­te­grated Asia en­joy­ing more in­flu­ence on the in­ter­na­tional stage. To reap those ben­e­fits, Asia must mit­i­gate re­gional mil­i­tary and po­lit­i­cal con­flicts and de­velop a long-term vi­sion for re­gional in­te­gra­tion.

Asia is home to some of the world’s most dan­ger­ous flash­points. There is a risk of armed clashes in the East and South China Seas, and North Korea con­tin­ues to de­velop nu­clear weapons and bal­lis­tic mis­siles, de­spite tougher sanc­tions pushed by the United States and the United Na­tions. Stronger co­op­er­a­tion among Asian coun­tries, to­gether with the in­ter­na­tional com­mu­nity, could ease re­gional ten­sions and lead North Korea to aban­don its nu­clear weapons pro­grams.

Some re­gional in­sti­tu­tions have al­ready been es­tab­lished, in­clud­ing the As­so­ci­a­tion of South­east Asian Na­tions (ASEAN), ASEAN+3 (the 10 mem­bers of the ASEAN plus China, Ja­pan, and South Korea) and the East Asia Sum­mit (EAS). Such in­sti­tu­tions will be crit­i­cal to re­solv­ing con­flicts and es­tab­lish­ing a frame­work for peace that can sup­port re­gional pros­per­ity and global lead­er­ship.

But that is only the first step. And whether Asian lead­ers share a com­mon vi­sion for re­gional in­te­gra­tion re­mains un­clear. Judg­ing by Europe’s ex­pe­ri­ence – from the cre­ation of the Euro­pean Coal and Steel Com­mu­nity in 1951 to the es­tab­lish­ment of the Euro­pean Union in 1993 – there is no need to rush the in­te­gra­tion process. But it will take a lot of time and ef­fort.

Per­haps the best way to kick-start this process is to iden­tify ar­eas where the re­gion can gain the most from in­te­gra­tion, and take steps that will bring quick re­turns. For ex­am­ple, Asian coun­tries can move to­ward a sin­gle mar­ket with com­mon rules govern­ing trade and free move­ment of work­ers, es­pe­cially skilled ones. Launch­ing the Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship, a free­trade agree­ment cur­rently be­ing ne­go­ti­ated by ASEAN and six part­ners (Aus­tralia, China, In­dia, Ja­pan, South Korea, and New Zealand), would be an im­por­tant step in this di­rec­tion.

Given the vul­ner­a­bil­ity of cross­bor­der cap­i­tal flows, Asia must also pur­sue joint ac­tion on fi­nan­cial su­per­vi­sion, sur­veil­lance, and reg­u­la­tory is­sues to pre­vent and man­age crises. One spe­cific goal should be to im­prove the Chi­ang Mai Ini­tia­tive Mul­ti­lat­er­al­iza­tion, a US$240 bil­lion cur­rency-swap ar­range­ment, and its sur­veil­lance unit, the ASEAN+3 Macroe­co­nomic Re­search Of­fice. An­other should be to es­tab­lish a de facto Asian Mone­tary Fund with a broader mem­ber­ship.

It should be noted that none of th­ese ef­forts would aim to sup­plant ex­ist­ing sub-re­gional, re­gional and global in­sti­tu­tions. Rather, by mak­ing Asia a more ef­fec­tive and united ac­tor, new re­gional trade and fi­nan­cial mea­sures would com­ple­ment and strengthen cur­rent ar­range­ments.

For any of this to work, bu­reau­cra­cies and the pri­vate sec­tor, in­clud­ing busi­ness lead­ers and aca­demics, must ac­tively sup­port high-level po­lit­i­cal com­mit­ments to in­te­gra­tion. Such sup­port should not be too dif­fi­cult to muster. Af­ter all, in­te­gra­tion would fa­cil­i­tate the ex­change of valu­able knowl­edge, from ef­fec­tive eco­nomic and so­cial poli­cies to tech­no­log­i­cal and sci­en­tific in­sight.

Fo­rums and di­a­logues on re­gional pub­lic goods could also prove valu­able by pro­mot­ing co­op­er­a­tion on cross-bor­der chal­lenges, in­clud­ing epi­demics, nat­u­ral dis­as­ters, and en­vi­ron­men­tal degra­da­tion. Per­son-to-per­son con­nec­tions would help to high­light for Asian so­ci­eties their cul­tural com­mon­al­i­ties and shared val­ues, fos­ter­ing progress in ar­eas where par­tic­u­lar coun­tries might lag.

At a time when the global order is in­creas­ingly uncer­tain, Asia should take its fate into its own hands, by pur­su­ing closer eco­nomic and po­lit­i­cal re­gional co­op­er­a­tion. If Asian coun­tries can de­velop a shared vi­sion for an eco­nomic com­mu­nity and a po­lit­i­cal as­so­ci­a­tion, this cen­tury could be theirs. – Project Syn­di­cate

Lee Jong-Wha, pro­fes­sor of eco­nomics and di­rec­tor of the Asi­atic Re­search In­sti­tute at Korea Univer­sity, served as chief econ­o­mist and head of the Of­fice of Re­gional Eco­nomic In­te­gra­tion at the Asian De­vel­op­ment Bank and was a se­nior ad­viser for in­ter­na­tional eco­nomic af­fairs to for­mer pres­i­dent Lee Myung­bak of South

Photo: Thiri Lu

A man walks on the new foot­bridge in down­town Yan­gon.

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