Asian economies work well together


The third High-Level Conference on Asian Economic Integration was jointly organized last week in Taiyuan, Shanxi, by Shanxi University for Economics and Finance and the Research and Information System for Developing Countries (RIS) of New Delhi, India. This initiative was supported by the Sasakawa Foundation in Tokyo, which was also an active partner in the first two conferences.

This series of high-level conferences is thus an initiative of the three big Asian powers, who are rightly leading Asian economic integration. What stood out was a clear feeling of optimism that Asia is poised to accelerate its economic integration, especially in the lead-up to the East Asia Summit (EAS), which will take place in Kuala Lumpur in December.

At least five major themes emerged in Taiyuan, giving rise to this optimism.

First, it was stressed in the official opening remarks that the time was right for the launch of Asian economic integration, as economies in the region take off. The mood in Asia is optimistic, as economic growth has proven to be sound and buoyant, despite the rise of oil prices and economic slowdowns in the United States and Europe. China and India, and eventually Japan, will be the much-needed engines of growth, especially in trade.

Indeed, Asia's economic integration will be more and more trade, investment and consumption-led, as these three pillars will no doubt constitute the key elements of Asian growth and integration.

It was also pointed out in the opening paper that sub-regional entities have perhaps reached their limits, as they may not be able to exploit the full potential of growth through the synergy of these economies alone.

This is perhaps the case for ASEAN, as the financial needs in terms of infrastructure-building, as well as the potential of markets, may have reached their limits.

It is here that Japan - and even the Republic of Korea, Australia and New Zealand - could step up in the first place, with China and India providing a later boost.

Complementary elements would definitely offer even greater potential in an all-inclusive "ASEAN plus China, India, Japan, South Korea, Australia and New Zealand" grouping, when launched in Kuala Lumpur.

Asia is coming to realize its interdependence is growing very quickly - not only economically and financially, but also in other social areas, ranging from health and education to environment and social development. Asian countries have become fully aware of their total interdependence and common vulnerability, as the past three years have adequately and unfortunately proven.

Moreover, the scourge of terrorism and piracy have also locked Asian countries together in the Melaka Straits and the adjoining Indonesian maritime domains, as well as in the South China Sea.

This common vulnerability and interdependence that binds Asia together is progressively emerging in the common consciousness of Asians.

There is an urgent need for Asians to adopt a pragmatic, progressive and open approach to growing regionalism and economic integration. Asian economic integration must be progressive so as not to give the feeling of a heavy handed top-down government-only approach, but should be pragmatic, as the economies evolve towards integration, with the process balancing both social and economic imperatives.

Moreover, Asian economic integration must be undertaken in an inclusive way, in line with Asia's goal of "open regionalism," as its economies also depend heavily on external trade. Asians must therefore assure Americans and Europeans that Asian integration is not undertaken at their expense, as Asian economic integration should not be seen as a threat.

One way to promote economic integration developed during the conference consists of joining the existing and negotiated Free Trade Agreements (FTAs) into a region-wide Asian FTA.

Lastly, there is also a need to create a "one-ness" or an "Asian-ness" within the region - a feeling of "one Asia." The crucial question of an emerging Asian identity arises, as Asians should feel a certain togetherness as a people, forging a common destiny. But an Asian identity of togetherness and commonality must be built progressively, if Asian integration is to be based on a solid foundation.

By Eric Teo Chu Cheow
(China Daily, September 22, 2005 http://www.chinadaily.com.cn/english/doc/2005-09/22/content_479928.htm)

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