ASIA
21 October 2014
Team Asia?
What is holding Asia back from greater cooperation and integration, and becoming a true "Team Asia"?
China is inflaming territorial disputes with several of its neighbours. It is also mismanaging social tensions in Hong Kong. The Japanese government regularly upsets its neighbours by visiting the Yasukuni Shrine which honours war criminals. India has an intractable dispute with Pakistan over Kashmir. And Asia's shining example of cooperation, the Association of South East Asian Nations (ASEAN), is only dawdling to the eventual realisation of its Economic Community.
What is holding Asia back from greater cooperation and integration, and becoming a true "Team Asia"? Could Asia ever build systems for cooperation similar to those which Europe built in the post-war period?
For starters, Asia is very much more diverse than Europe. Diversity is in fact the definition of Asia -- in terms economic development (from dirt-poor Laos to rich Singapore), politics (from democracy to dictatorship and everything in between), economics (from free markets to state capitalism and more) and religions (Buddhism, Christianity, Hinduism, Shintoism and so on).
This means that a meeting of the minds is more problematic, even when it serves national interests.
Asia has also not managed to solve a vast array of historical disputes and conflicts, many of which date back to World War 2 and earlier. This has been exacerbated by rapid economic development and rising economic power which has fostered more assertive postures. Adding fuel to the fire has been state-sponsored popular nationalism in China and elsewhere.
Reconciliation between the region’s various rivals seems a distant prospect.
The continuing military presence of the US in Asia is a lightening rod. It is seen as anachronistic by China -- despite the two countries’ economic co-dependency -- but is seen as increasingly necessary by its neighbours.
Another factor is that fragile democracies and authoritarian regimes are less willing to pool sovereignty and open their economies and societies to the same extent as Europe has. This can pose a threat to their already weak grip on power.
Amidst all these imponderables, economic integration through market-driven trade and investment has been booming in Asia, especially since the 2008 Lehman shock. Japan led the way in establishing value chains following the 1985 Plaza Accord to appreciate the yen. And despite its subsequent relative economic decline, Japan remains Asia's technology leader, with much to offer China and other countries. In more recent years, rapid Chinese economic growth
has fostered regional integration and prosperity in its neighbours.
Looking ahead, the US and European economies will likely remain on a lower growth trajectory for some time. Asian prosperity will thus increasingly depend on the region's capacity for cooperation. A number free trade and economic partnership agreements have been negotiated, and more are in the works. But much more needs to be done, especially in terms of free trade between China, Japan and Korea.
The recent softening in rhetoric between China and Japan highlights a realisation that political disputes can have huge adverse economic effects. And further that economic integration can provide a basis for better political relations.
But as the case of Europe one hundred years ago demonstrates, highly integrated economies can still go to war. The ultimate lesson for Asia from Europe's historical experience is that a hundred years or more of conflict is a very costly path towards reconciliation and cooperative solutions.
As Tony Blair has argued, history shows that reconciliation happens "when the sense of shared opportunity is greater than the separate sense of grievance". But seizing the shared opportunity for reconciliation and building a Team Asia would require enlightened leadership from several leading countries. Sadly, such leadership is lacking in Asia at the moment, and the risk of accident-induced conflict is ever too present.
What is holding Asia back from greater cooperation and integration, and becoming a true "Team Asia"? Could Asia ever build systems for cooperation similar to those which Europe built in the post-war period?
For starters, Asia is very much more diverse than Europe. Diversity is in fact the definition of Asia -- in terms economic development (from dirt-poor Laos to rich Singapore), politics (from democracy to dictatorship and everything in between), economics (from free markets to state capitalism and more) and religions (Buddhism, Christianity, Hinduism, Shintoism and so on).
This means that a meeting of the minds is more problematic, even when it serves national interests.
Asia has also not managed to solve a vast array of historical disputes and conflicts, many of which date back to World War 2 and earlier. This has been exacerbated by rapid economic development and rising economic power which has fostered more assertive postures. Adding fuel to the fire has been state-sponsored popular nationalism in China and elsewhere.
Reconciliation between the region’s various rivals seems a distant prospect.
The continuing military presence of the US in Asia is a lightening rod. It is seen as anachronistic by China -- despite the two countries’ economic co-dependency -- but is seen as increasingly necessary by its neighbours.
Another factor is that fragile democracies and authoritarian regimes are less willing to pool sovereignty and open their economies and societies to the same extent as Europe has. This can pose a threat to their already weak grip on power.
Amidst all these imponderables, economic integration through market-driven trade and investment has been booming in Asia, especially since the 2008 Lehman shock. Japan led the way in establishing value chains following the 1985 Plaza Accord to appreciate the yen. And despite its subsequent relative economic decline, Japan remains Asia's technology leader, with much to offer China and other countries. In more recent years, rapid Chinese economic growth
has fostered regional integration and prosperity in its neighbours.
Looking ahead, the US and European economies will likely remain on a lower growth trajectory for some time. Asian prosperity will thus increasingly depend on the region's capacity for cooperation. A number free trade and economic partnership agreements have been negotiated, and more are in the works. But much more needs to be done, especially in terms of free trade between China, Japan and Korea.
The recent softening in rhetoric between China and Japan highlights a realisation that political disputes can have huge adverse economic effects. And further that economic integration can provide a basis for better political relations.
But as the case of Europe one hundred years ago demonstrates, highly integrated economies can still go to war. The ultimate lesson for Asia from Europe's historical experience is that a hundred years or more of conflict is a very costly path towards reconciliation and cooperative solutions.
As Tony Blair has argued, history shows that reconciliation happens "when the sense of shared opportunity is greater than the separate sense of grievance". But seizing the shared opportunity for reconciliation and building a Team Asia would require enlightened leadership from several leading countries. Sadly, such leadership is lacking in Asia at the moment, and the risk of accident-induced conflict is ever too present.