Getting down to serious business at APEC

Pana Janviroj, The Nation, Asia News Network, Bangkok

Much has been done to promote next month's Apec leaders summit in Bangkok. Never before have the city's mushrooming billboards devoted themselves to one single topic. It is as if, for a couple of days, Thailand will become the centre of the universe.

And it will, as the leaders from the 21 Asia-Pacific economies convene here for a series of meetings and unprecedented spectacles. Their activities in Bangkok will be beamed around the globe by CNN.

But increasingly as the Apec leaders' Oct. 20 to 21 summit date approaches, the startling reality of serious challenges facing the Asia-Pacific region is coming to the fore. The initial emphasis given to Apec's grandness rather than its essence, or the tendency of many Apec officials to play down meaningful issues to be tackled at this forum, may indeed prove a mistake.

It is true that some previous Apec leader summits did not prove to be earthshaking. Yet, despite Apec agreements being non- binding, the forum itself, along with its potential as an economic bloc, is accorded great influence. Apec spurred the European Union to become more focussed on Asia through the creation of the annual meetings of leaders of Asia and Europe, known as Asem.

Less by design than by accident, this year's Apec leaders summit in Bangkok could prove to be a watershed in the "new world economic disorder" for the next 10 to 15 years.

As host, the Thai government is supposed to set the agenda. Like it or not, the agenda is being forced into its hands by runaway world events, especially in recent months. These include growing protectionism in the U.S., greater pressure on China to adopt a more flexible exchange rate system, and the collapse of world trade talks at Cancun with Japan accused of being one of those nations responsible.

Against this backdrop is continued relentless deflationary pressure in the Asia-Pacific region, especially of cheap products being produced and exported from China. This is seen as a great threat to Japan, South Korea and particularly the economies of Southeast Asia.

Singapore and Thailand now see their only course is to counter this by creating an Asean common market, which will be discussed by the bloc leaders at their own summit in Bali at the beginning of next month.

At the Apec summit in Bangkok, television images will show the 21 leaders impressed by Thai hospitality, which will obviously be memorable and on a grand scale. But the wheel of Apec's influence will be turned by the leaders of the three economic superpowers coming to the summit.

The United States, Japan and China, individually and together, have a unique opportunity at this Apec meeting to set the world on a course of a predictable economic order if they are able to agree on a common agenda and take the other 18 economies with them.

But their visions are far from united. For instance, the U.S. under President George W Bush is acting and thinking like the sole superpower, an attitude which will hardly convince others to become amicable economic partners.

Bush's global political and security agenda often overrides even the economic interests of the U.S., as highlighted critically by well-known economist Paul Krugman.

At the Apec summit in Bangkok, President Bush should reverse this course and take a sane look at the future of the American economy. At the moment, his administration is blinded by its security agenda and eager to play any card which will aid next year's election campaign. Pursuit of the political and security agendas need their own time and place, but not here in Bangkok.

Japan has been a "difficult" nation in the past decade. It has stopped being an engine of growth even for countries in the Asia and Pacific. It is caught in a trap of seeking a lower yen exchange to keep its economy on a lifeline while in fact it needs to boost demand in the region. The only course for Japan to get out of this trap is to integrate its economy with someone else. It can be with Asean or with other East Asian economies.

For China, it does accept that a flexible exchange system is a way forward for its economy, but it can do so without constant bashing from Washington and Tokyo. In fact, a steady revaluation of the yuan would be good for everyone because it would ease political pressure from Washington and deal with the deflationary pressure on the export prices of manufacturing products which is causing all kinds of upheaval in Asean economies.

A joint action plan from the three superpowers to lift the gloomy world economic outlook should not be ruled out at this Apec leaders summit in Bangkok. Thai Prime Minister Thaksin Shinawatra's agenda on the binding together of Asian nations, bilateral free trade arrangements and the Asia Bond should be redefined in order elevate the dynamism of the Asia-Pacific economies, rather than be stand-alone goals.