• 
• 

Published on January 25, 2008

Government leaders, corporate giants, financial gurus, social entrepreneurs, influential academics and opinion leaders of all sectors and shades converge here, not to engage in winter sports but to play mental gymnastics, trying to grasp the complexity of the global dilemma and offer the best way forward for humanity.

The Asean leaders are here too, in solidarity with the prime minister of Japan and senior ministers for the economy from China, South Korea and India. Together and separately, they are trying to raise awareness and confidence about their region and its direction in political and security coordination and economic cooperation.

While the Asean leaders have recently been touting their new charter after four decades of existence, we have also heard them praising an East Asian Community. The Asean public may be confused about this grand vision of double entities which includes, first, "the three major economies in the Northeast important to Southeast Asia". Then "India, Australia and New Zealand" were included. The logic lies in another double strategy of consolidation and expansion.  

For a long while the Asean countries have been providing friendly stages for many "power players" in Asia and the Pacific who have been invited to summits and ministerial meetings to discuss their priorities. Many of them have some historical baggage and intense but "suppressed" rivalry that would make it difficult for them to sit at the same table.

 The Asean culture of "threatening none, accommodating all" has for the past three decades given much needed opportunity for everyone to size each other up, explore sensitive issues, feel the depth of animosities that need to be resolved if the rise of Asia is going to materialise.

The phenomenal rise of China and India has taken much of the limelight from the Asean stage. While the players of East Asia and the Pacific still value the Asean processes of dialogue and consultation, they also begin to realise that they need their own "tract two" to promote their own interests. Asean has given them a valuable period of "getting to know you", now they need to go beyond talks and move toward tangible action.

From now on, the grouping must consolidate and leverage all resources and geographical advantage to remain relevant and continue its role as the centrepiece of East Asia Community building.

If anyone wants evidences of this "Asia Rising" phenomenon, he should only look at some statistics. East Asia's exports rose from 14 per cent of the world's total in 1980 to 27 per cent in 2006. The region's total imports expanded from 15 per cent to 24 per cent during the same period.

Foreign direct investment (FDI) inflows into East Asia, including Japan, more than tripled from 5 per cent of world's total in 1980 to 2005. And the region's share of FID outflows increased from 5 per cent to 10 per cent during the same period.

But what is more important is the fact that such growth has been accompanied by the parallel rise in intra-regional trade - among the countries in East Asia themselves.

Now more than 50 per cent of the region's trade is among itself. While that figure is less than the 65 per cent the members of the EU achieved when they were only 15 in 1990,  it is more than the 47 per cent the North America Free Trade Area (Nafta) attained in 2000.

Encouraged by such growth and a real prospect of more good things to come, leaders in the region now begin to take their potential seriously.

It is in that manner that the Asean leaders are trying to turn the "challenge of the rise of China and India" into "the boon of the rise of East Asia". But they realise too that this new model of economic cooperation could be perceived as a potential "fortress Asia", as the EU was once feared. They need to keep their promise of "open regionalism".

They decided to bring in Australia and New Zealand to give a semblance of a friendly regional bloc. For their part, the "two Europeans in Asia" are eager to play their role as members of the new community.

All this proves that the tangled web of relations created by the Asean processes of Dialogue Partnership are now producing results in more ways than were originally intended. The Asean leaders have been able to re-invent their organisation to occupy centre stage as the rest of Asia hastily builds a larger community.

If Western Europe rose from the rubble of World War II to become the Common Market and the EU, East Asia has its financial crisis of the late 1990s to give it impetus to create a community of its own.

Whether or not the Asean leaders succeed in the "double strategies of consolidation and enlargement" will be interesting to watch. They are now at the World Economic Forum (WEF) at Davos. Led by Prime Minister Lee Hsien Loong of Singapore, its current Chair, the Asean leadership is taking a proactive approach to engaging the world. They know where the global power is, and are willing to bring their enthusiasm and dynamism to their counterparts who have been shaken by the delayed aftermath of the US sub-prime fiasco.

They are here against the backdrop of volatile financial markets around the world, including in East Asia. In this year's subdued and uncertain WEF, it will be interesting to see if East Asia will be able to reassure the world of its own strategy to help pull the global economy out of its current volatility.

Because of its sheer size and pace of growth, East Asia has a responsibility to reassure the world that the strategies and decisions to bring stability to its own financial markets will not compound the severity of the problem. If the East Asian leaders can assure the world gathered here this week that they can help fix the imbalances in trade, currency exchange rates and discrepancies created by the dizzying pace of growth in their part of the world, a little calm could return to the world financial markets.

That reassurance will also benefit Asean because of the connectivity between Southeast and Northeast Asia. And it will deliver a powerful message: that an East Asian Community has emerged with efficiency, responsibility and confidence.

Thus, the double strategies of the Asean leaders will prove effective and believable. Asean is undeniably a leading region at the heart of dynamic Asia.

Surin Pitsuwan is secretary-general of Asean.

Surin Pitsuwan

Davos, Switzerland