Thu, 27 May 2004

Asia needs economic community

Akira Kojima, The Straits Times, Asia News Network, Singapore

China and other parts of Asia are embracing possibilities for further development and the establishment of a regional community in the 21st century.

However, the development process is not a straight line. There are uncertainties and risks involved, so strategic cooperation among Asian countries is essential.

The Cold War that shaped much of the last century has ended, and the victory of capitalism has been confirmed. The "end of history" theory attracted people's attention at one time; however, in reality, history is being created apace, sometimes bringing turmoil and chaos.

Poland became a new member of the European Union (EU) this spring. Speaking before a Trilateral Commission meeting early this month, when horse chestnuts were blooming all over Warsaw, Polish President Aleksander Kwasniewski proudly said: "Welcome to a united Europe." Over a long period, the EU has grown into a large European group made up of 25 member countries sharing a common identity, through strong political will and a philosophy based on peace and prosperity.

In Asia, in contrast, nations encompass a wide variety of historic backgrounds, cultures, ethnic groups, and religions. Such geographic divisions resulted in a lack of common philosophy and identity in Asia.

However, as Asian economies have been expanding rapidly, particularly since the mid-1980s, countries have been developing considerable mutual dependencies, naturally creating a common regional identity among Asian countries.

Economic development is steering attention away from a past of poverty and chaos towards a future of potential prosperity in which everyone can share. As Asian countries have shifted attitudes towards future-oriented approaches, many regional conflicts have eased or disappeared.

Serious concerns still remain regarding the Korean Peninsula but, in general, economic development is creating views focusing on the future, and is nurturing a cooperative approach rather than confrontation, while improving security. An Asian-style security model may be forming, in sharp contrast to other regions where nations sought peace through political processes but conflicts and wars between different ethnic groups and religions erupted when the Cold War ended.

In Asia, regional cooperation and integration has already gone beyond the level of expectation and discussion, and is already developing a concrete form.

The Association of Southeast Asian Nations has added many members over the years and has been transformed into a cooperative body for regional development. It has forged an agreement to liberalize the movement of goods, services, investment, and capital among member countries by 2020.

I met Professor Richard Cooper of Harvard University at the Warsaw conference. "It is difficult to establish an Asian union within the next 10 years," he said, but added that "anything is possible in 20 to 25 years".

The next 10 to 20 years of global history will feature accelerating change. Mohamed Noordin Sopiee, chairman and chief executive officer of the Institute of Strategic and International Studies Malaysia, said a union of East Asian countries will feature quick progress, as opposed to the slow pace of EU integration.

He focuses on the fact that economic integration is increasing with free trade agreements.

China's surging growth is dominating recent international economic discussion, but the country has been a great power for many centuries in its long history.

The Organization for Economic Cooperation and Development says China accounted for an overwhelming 29 percent of combined global gross domestic product (GDP) in 1820. India was in second place with 16 percent, France was third with 5.4 percent, and the United States was in ninth place with a mere 1.8 percent.

To recover its "two lost centuries", China released a plan to quadruple GDP by 2020. A fourth generation of increasingly unorthodox senior Communist Party officials are seeking to retain legitimacy by realizing economic development, and have accelerated the speed of reform and the opening of the nation to the world. Since sustained inward investment and secure export markets are critical issues, China's foreign policy will probably remain friendly to all for some time.

The arrival of a new great power tends to strain international order. However, it is important to smoothly integrate China into the global economy and political order. In addition, there is great potential for the development of Asia, including China, but it is not a straight path. Other countries need not be threatened by China's advancement.

Instead, Japan and the international society need to realize that cooperation for controlling regional uncertainties and critical situations is the way to establish an Asian-style development model and security in the 21st century.

The writer is chairman of the Japan Centre for Economic Research. This paper is prepared for the Nihon Keizai Shimbun International Conference on the Future of Asia, to be held in Tokyo on June 3. The Straits Times is the conference's Singapore media partner.