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Asia needs shared vision and collective leadership to recover lost momentum
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THERE is no question that Asia’s standing in the global economy is stronger than ever. The region now produces about 40 percent of the world’s GDP, measured according to purchasing power parity.
During the recent economic crisis, Asia accounted for more than half of global GDP growth.
Add to that a massive population and growing political influence, and Asia finally appears ready to lead on a world stage long dominated by the West.
But it is too early to open the champagne. The United States and Europe maintain an advantage, in terms of global strategic influence, while Asian countries are facing major political, economic and security challenges.
In fact, Asia’s growth momentum is declining. Across the region, rising income inequality, financial instability and environmental degradation are hampering development.
More problematic, despite being deeply interdependent, the region’s countries struggle to act collectively.
But, at a time when Western countries are moving toward isolationism, intra-regional trade and investment are more important than ever.
Beyond the economic benefits, integration would yield important political benefits, with an integrated Asia enjoying more influence on the international stage.
To reap those benefits, Asia must mitigate regional military and political conflicts and develop a long-term vision for regional integration.
Some regional institutions have already been established. But that is only the first step.
And whether Asian leaders share a common vision for regional integration remains unclear.
No need to rush
Judging by Europe’s experience — from the creation of the European Coal and Steel Community in 1951 to the establishment of the European Union in 1993 — there is no need to rush the integration process. But it will take a lot of time and effort.
Perhaps the best way to kick-start this process is to identify areas where the region can gain the most from integration, and take steps that will bring quick returns. For example, Asian countries can move toward a single market with common rules governing trade and free movement of workers, especially skilled ones. Launching the Regional Comprehensive Economic Partnership, a free-trade agreement currently being negotiated by ASEAN and six partners (Australia, China, India, Japan, South Korea and New Zealand), would be an important step in this direction.
Effective and united actor
Given the vulnerability of cross-border capital flows, Asia must also pursue joint action on financial supervision, surveillance, and regulatory issues to prevent and manage crises.
It should be noted that none of these efforts would aim to supplant existing sub-regional, regional and global institutions. Rather, by making Asia a more effective and united actor, new regional trade and financial measures would complement and strengthen current arrangements.
For any of this to work, bureaucracies and the private sector, including business leaders and academics, must actively support high-level political commitments to integration. Such support should not be too difficult to muster. After all, integration would facilitate the exchange of valuable knowledge, from effective economic and social policies to technological and scientific insight.
Forums and dialogues on regional public goods could also prove valuable by promoting cooperation on cross-border challenges, including epidemics, natural disasters, and environmental degradation.
Person-to-person connections would help to highlight for Asian societies their cultural commonalities and shared values, fostering progress in areas where particular countries might lag.
At a time when the global order is increasingly uncertain, Asia should take its fate into its own hands, by pursuing closer economic and political regional cooperation.
If Asian countries can develop a shared vision for an economic community and a political association, this century could be theirs.
Lee Jong-Wha is Professor of Economics and Director of the Asiatic Research Institute at Korea University. His most recent book, co-authored with Harvard s Robert J. Barro, is “Education Matters: Global Gains from the 19th to the 21st Century.” Copyright: Project Syndicate, 2016. www.project-syndicate.org
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