New infrastructure for economic and financial reform needed

14 October 2014

Source: Business World (Philippines)
Source type: Newspaper
Published on: 28 Sep 2010

On Oct. 4 and 5, almost 50 European and Asian leaders will descend on Brussels for the biannual Asia-Europe Meeting (ASEM). Together, participants of ASEM represent half of the world�s gross domestic product, almost 60% of the world�s population and more than 60% of global trade.

There were positive signs at the last summit meeting in Beijing in 2008, when ASEM’s leaders had the first major discussion on how to contain the global financial crisis. These discussions provided inputs to the G-20 summits, which have replaced the G-8 as the main global economic discussion forum.

Asian countries have weathered the financial and economic crisis much better than anticipated, with China, India and several others (including the Philippines) notching up impressive growth rates. But they need to boost sales in Europe to maintain these impressive growth rates and European development aid is important for Asia’s smaller, poorer nations.

This year’s summit will inevitably focus on the continuing fallout from the economic and financial crisis.

But leaders will also discuss ways to encourage more Asia-Europe cooperation on energy, environmental protection, sustainable development, and common challenges, including counter-terrorism, fighting piracy in international waters and organized crime.

However, if the Asia-Europe relationship is to progress and go beyond ritual and process, both sides must stop focusing on style and protocol and look more closely at the substance of their ties.

Tackling key global challenges requires the active participation of Europe and Asia’s leading powers.

As Europe enters a period of economic austerity and cutbacks, Asia’s dynamic economies offer a huge and lucrative market for European technology, goods and services. Asia is Europe’s largest trading partner and, after a slowdown in 2008, business between the two regions is again booming. EU trade with Asia amounted to more than €750 billion in 2009 and total European investments in the region are estimated at €350 billion. Increasingly, Asian companies are seeking to set up shop in the EU.

If ASEM is to move forward and do things -- as opposed to talk about things -- then both sides will have to develop a fresh, inclusive mind-set, which focuses on what binds Asia and Europe together rather than what divides them.

Discord may make newspaper headlines, but the two regions are connected by history, culture, business and the challenge of living together in a rapidly changing globalized world. Asia and Europe must craft a new growth model for their economies and move ahead with much-needed reform of the international economic and financial architecture, including International Monetary Fund governance, to reflect the rising economic power of Asia.

On trade, ASEM leaders must make a compelling case for open markets and an early conclusion of the long-stalled World Trade Organization talks on global trade liberalization. At the same time, support for globalization in the poorer countries can be maintained only if there is more attention paid to the "losers" from globalization.

Fresh approaches are required to help achieve the Millennium Development Goals and move forward on climate change.

ASEM provides a good framework for innovative, creative thinking on how to make aid more effective, ensure better coordination among donors, facilitate trade and encourage open markets.

Efforts to combat global warming, meanwhile, would benefit from a shift in the focus of the debate from confrontation on achieving binding emission standards to cooperation on developing a low carbon economy, which allows for a reduction in greenhouse gas emissions while maintaining the momentum toward economic and social development.

The important role of non-state actors must be highlighted in order to make ASEM more participatory, democratic and focused on societal challenges. The Asia-Europe People’s Forum brings together nongovernment organizations to discuss areas of common concern such as human rights and democracy. Asia-Europe business leaders also have their own forum which convenes in parallel with the ASEM Summit and makes recommendations on enhancing economic cooperation between the two regions.

At the ASEM Public Conference on Europe-Asia Inter-Regional Relations in mid-July, European Commissioner for International Cooperation Kristalina Georgieva emphasized the need for Europeans to make a greater effort to understand Asian culture. She called for more people-to-people exchanges between members of parliament, civil society and centers of education. Akiko Fukushima from the Japan Foundation, who called for "a new recipe for cultural exchange," is also pushing for more attention to be paid to the cultural dimension of international affairs.

While media will inevitably focus on the heads of state as they descend on Brussels, a real improvement in Europe-Asia relations depends on the non-state sector. To be sure, the governments have to ensure the right political environment to strengthen their role.

While there is much to be done, it is very unfortunate that President Benigno Simeon C. Aquino III -- most probably based on inaccurate information -- decided against joining almost 50 other European and Asian leaders in Brussels to present the "new" Philippines.

There is no question that Europe, the political and the business side, wants to interact with the new CEO of Philippines Incorporated. With this opportunity gone, it is urgently needed to find a new date for President Aquino to visit Europe.

-By Henry Schumacher Readers may write to leave feedback.