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Asia's summit season: Just alphabet
soup
By Gary LaMoshi
DENPASAR, Bali - With US President George W Bush
come and gone from this island, wave goodbye to Asia's
alphabet-soup season. Asia has endured the annual
summits of ASEAN (Association of Southeast Asian
Nations) and APEC (Asia-Pacific Economic Cooperation)
and their accompanying, abbreviated forums for business
executives, government ministers and other big shots.
Plus, Malaysia last week hosted the triennial
OIC (Organization of Islamic Conference) summit, where
the host labored to ensure the gathering received global
attention (see Mahathir on Jews: What he said,
October 23).
If you thought this year's serving
of alphabet soup might provide a healthy fillip for the
economic and commercial concerns of the region, a
helping hand to relieve persistent poverty,
underdevelopment and slow growth, or perhaps even few
spoonfuls of caution amid currency-rate concerns and
swelling overseas portfolio investment (aka hot money)
reminiscent of the run-up to the crash of 1997
(see Asian equities: It's the price, not the
quality), you left the table hungry.
Terrorist hijacking
As at last year's
APEC summit in Cabo San Lucas, Mexico, the United States
hijacked the agenda in Bangkok with its obsession about
terrorism (as the Bush administration defines it) and
related security issues (see APEC terrorized out of focus,
October 31, 2002). Malaysian Prime Minister Mahathir
Mohamad warned that those issues have no place at an
economic forum, and his voice was heard. The leaders'
final communique permanently inserts security issues
into the APEC summit agenda.
On the economic
front, the Bangkok summiteers settled for reiterating
(unfulfilled) pledges from APEC meetings past and
directing ministers to work toward accomplishing
something at next year's Chile confab. They touched on
the digital-divide issue raised last year, but that
awaits substantive action along with concerns that
haven't even reached the initiative stage on small and
medium enterprises, structural reform and financial
systems.
Surprisingly, the group failed to
mention exchange rates, though individual leaders
discussed it on the sidelines. It's an issue that
obsessed Japan earlier in the year, concerned with both
China's yuan and the dollar-yen rate, and Washington
until earlier during Bush's Asian trip (see Currency bickering risks recovery
blackouts, September 25). Moreover, currency
movements impact every sector - from the stock market in
Seoul to this week's paper-industry layoffs in New
Zealand. But terrorism crowded out this key economic
issue that roils relations among three leading APEC (and
global) traders.
Wrong idea
The beauty
of summits such as APEC is that they bring together
heads of governments able to produce concrete results on
a big idea or two. Terrorism is simply the wrong big
idea. It lacks the ability to inspire. Moreover, in a
world where one government's terrorist is another's
freedom fighter and can become tomorrow's summiteer, it
derails the group from economic issues where consensus
is more likely and progress concretely beneficial.
It may be naive to expect the APEC leaders to
accomplish much in a little over 24 hours that includes
the traditional team portrait in host-country outfits
and other photos opportunities (how'd you like the
tuk-tuk, Mrs Bush?), lavish entertainments, and,
more than ever it seems, opportunities for meetings on
the sidelines.
Perhaps the 21-nation APEC group
- including unlikely partners Papua New Guinea, Chile
and Russia - is too diverse to share concerns that
aren't also global issues. But surely APEC leaders could
set their sights higher than shoulder-fired missile
launchers.
Bali Concord II
If APEC is
too diverse for offer much common ground, ASEAN may be
too polite. But at least those 10 summiteers meeting in
Bali two weeks earlier took a stab at economic issues,
venturing far beyond this columnist's puny pre-summit
recommendation (see ASEAN can help public buy
privatization, October 1).
The leaders
agreed to create an ASEAN Economic Community (AEC) by
2020, along with additional regional pillars covering
socio-cultural and security concerns. Singapore's Goh
Chok Tong even suggested that AEC could happen sooner
than 2020. The proposal makes ASEAN look less like an
exclusive (former) golfing group and more like a
formidable economic community.
The regional
leaders put their nations on a path toward creating an
integrated market with a combined gross domestic product
(GDP) of more than US$700 billion and an equal figure in
trade. That's very impressive. At least it seems that
way, until you realize that the GDP figure for this
half-billion population is rough equal to Canada's with
30 million people, and the trade figure is roughly the
size of Japan's.
Unity in
diversity?
The AEC would encompass vast economic
disparities. Thailand's GDP per capita is 20 times as
large as Myanmar's; Singapore's is 200 times as large.
Singapore and Malaysia, the two most developed countries
in the group along with Brunei, account for more than
half of ASEAN's trade. External partners account for
more than 75 percent of the region's total trade, and,
as the moves to improve ASEAN's ties with China, Japan,
South Korea and India demonstrate, the key relationships
are with those outsiders.
Whether or not size
matters, there are additional issues that make the AEC
proposal a dubious proposition. Cambodia and Laos are
basically off the international economic radar, and
Myanmar is a pariah state whose presence in ASEAN
precludes getting what maybe they'd really like: a
free-trade agreement with the United States. Vietnam and
Malaysia don't play by the standard international
rulebook. (Even if Malaysia drops its currency controls,
it will have the touchy issue of bumiputra
[native Malay] ethnic preferences to settle as part of
any serious economic-integration regime.) Brunei and
Singapore are microstates. Indonesia and the Philippines
still haven't overcome the impact of the 1997 crisis.
Furthermore, ASEAN's leadership has failed to
present a compelling case for how the AEC will aid the
region's growth and development; the explanation that
it's the next logical step for the group ignores spotty
economic integration progress to date. The record of the
European Union, which has failed to rocket its member
states out of their decades-long stupor and may be
contributing to current woes with its one-size-fits-all
monetary and fiscal policies born of the single
currency, isn't a helpful precedent.
Even if you
believe ASEAN's disparate economies would be stronger
and more viable linked than they are separately, the
group's track record of seeking consensus and shunning
confrontation suggests that links will come at the
lowest common level and that the AEC may become another
layer of bureaucratic hindrance to investment and
growth.
Implementing the ASEAN Free Trade Area
(AFTA) has proved difficult, with many states clinging
to trade barriers to protect special-interest groups.
ASEAN has shown little inclination and less muscle to
force the issue. AEC can be seen as a way for ASEAN to
declare victory on AFTA and move on, rather than soil
its hands in contentious internal trade matters.
The AEC announcement may have also been a clever
way to overshadow Myanmar's refusal to free democracy
leader Aung San Suu Kyi despite ASEAN's entreaties. That
uncharacteristic attempt to influence internal affairs
in a member state left ASEAN battered. It will surely be
a long time before ASEAN sticks its neck out so far, a
bad omen for the forceful steps that will be needed to
make AEC a reality.
Although Asia got some new
additions to its alphabet soup - MANPAD (man-portable
air defense), AEC - this season's summit season didn't
produce a very hearty broth. The economic achievements
of these summits, thanks to a heavy hand on the
political shaker and a focus on today's headlines,
cooked up far more bull than bouillabaisse.
(Copyright 2003 Asia Times Online Co, Ltd. All
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