Rising Asia and old Europe need to work together (Originally published 21/03/12, co-authored with Giles Merritt)
Tempting as it may be, it would be wrong to write off Europe as yesterday’s power. Europe still matters even though this is not the message some EU policymakers have been sending out to a watching world.The impression that Europe is too busy dealing with internal challenges to play a strong global role is especially strong in Asia. True, China gets a great deal of EU attention. And the EU’s outreach on trade remains strong. But there is more to Asia than China - and trade and investment agreements must not be made a substitute for a more pro-active EU foreign policy.The EU must engage more strongly with South Asian and Southeast Asian countries on foreign policy and security questions, not just trade. This means top-level EU participation in Asian security fora such as the ASEAN Regional Forum (ARF). It means showing up and seriously participating in ministerial meetings with Asian countries such as the EU-ASEAN gathering of foreign ministers in Brunei in April. It also requires regular and consistent high-level conversations on global and regional challenges with India and other South Asian nations.Apart from trips to China, EU foreign policy chief Catherine Ashton has been a rare visitor to the rest of Asia. Her decision to stay away from the ARF last year, for a second year running, was a serious faux pas. Not surprisingly, Asians have put Europe’s request to join the East Asia Summit – the region’s prime security club – on hold and insist that Europeans must first prove they are ready for a serious conversation with Asia on security.European policymakers are selling Europe short. Asia cannot take Europe seriously unless it does a better job of communicating with the region – and gains better understanding of what makes increasingly self-confident Asians tick.Dealing with a changing and rising Asia will require that the EU engages in new courtships and new alliances with governments, businesses and civil society leaders in the region.The name of the game has to be partnership between Rising Asia and Old Europe. But by failing to engage seriously and consistently with Asia, Europeans are propagating a myth of European weakness and irrelevance.The reality of Europe – the eurozone crisis notwithstanding - is different. Given its experience in turning enemies into friends, voluntarily pooling sovereignty and achieving economic and political integration, the EU has a wealth of experience to share with Asia on future frameworks for global governance. More so, it scarcely needs saying, than the United States.Asians pressing ahead with their own efforts at regional integration and cross-border cooperation still look at the EU for inspiration. Interestingly, this is still the case although Europe’s practice of lecturing ASEAN on the subject has irked many Asians.The EU’s predominance in world trade is undiminished. EU-Asia trade is booming and is crucial both for Europe’s economic recovery and ensuring that Asian growth remains on track. The EU-Korea free trade agreement is the first in a series of trade-expanding deals that Europe is negotiating with Asian partners, including India, Malaysia, Singapore and Vietnam.Europe is the biggest source of foreign investments in Asia. Today, the eurozone crisis has made Europe’s frontier-free single market even more of a magnet for Asian investors. A recent survey underlined that 45 % of businesses in Asia are either currently doing or looking to make strategic acquisitions in Europe in the next 12 months, compared with just 14 % cent in the Middle East and 7 % in North America.Although Asian exporters and businesses may complain about Brussels’ heavy-handed ways, the EU has fostered the development of high-quality rules and standards which help shape global norms in areas such as food and consumer products, cars, chemicals, aircraft emissions. European companies are leading innovators in clean and green technologies that Asia needs to meet the challenge of low-carbon growth and urbanisation and realise their plans for increased connectivity among nations.It is the coming overhaul of the many aspects of the EU rulebook – from financial services to climate issues – that will maintain the EU’s clout and influence.Neither Europe nor Asia can work alone to tackle threats to global stability that range from resource competition, nuclear proliferation, overpopulation to climate change.Europe isn’t indifferent and certainly not irrelevant to Asia’s rise. As the US speaks of the Asia Pacific Century and seems to reinforce its presence in Asia, Europe must develop its own blueprint for improved engagement with the region.
Progress expected in EU-Japan free trade talks (Originally published 09/03/12)
As Japan struggles to recover from the devastating effects of last year’s earthquake as well as the ensuing tsunami and nuclear crisis, the EU has given encouraging signals of progress in negotiating a free trade agreement with Tokyo.In talks in Tokyo recently, Denmark’s Minister for Trade and Investment, Pia Olsen Dyhr, Japan’s Foreign Minister Koichiro Genba and Yukio Edano, Minister for Economy, Trade and Industry, agreed to try and speed up the so-called “scoping” exercise aimed at exploring the pros and cons of an EU-Japan FTA.They said negotiations on the free trade pact should start during the Danish EU Presidency which ends on June 31.Denmark’s determination to get the ball rolling on the trade deal is good news. Apart from the obvious trade benefits of such an agreement, the FTA will also help strengthen the EU’s still under-developed strategic relationship with Japan.If both sides play their cards right, the EU and Japan could agree to launch the FTA talks at their annual summit in May in Japan. Both sides will have to work hard, however, to try and reach that goal.Interestingly, Japan is also considering participation in negotiations for the Trans-Pacific Partnership free-trade initiative launched by US President Barack Obama last year.It is not proving easy, however. Other TPP participants, including Australia, have called on Japan to eliminate tariffs on beef, dairy products and sugar in order to join the initiative.Japanese officials say they will place all items, including politically sensitive farm items, on the table for discussion once Tokyo fully joins the TPP talks. Japan needs to secure approval for its participation from all nine countries currently involved in the TPP talks.Among the nine TPP participating countries, Brunei, Chile, Malaysia, Peru, Singapore and Vietnam have already informed Japan of their support. However, US officials have not given Japan the go-ahead.Meanwhile, Japan’s economy continues to feel the effects of the March 11 catastrophe. Rebuilding the country's infrastructure is proving difficult. Many people in the affected areas, whose resilience and perseverance impressed everyone last year, are still striving to rebuild normal lives.The country posted a record 19 billion dollar trade deficit in January as the yen’s strength and weaker global demand eroded manufacturers’ profits.Exports of cars and electronics have been hit by damaged plants and infrastructure. In the latter half of the year, floods in Thailand knocked out more Japanese production capacity, while overall shipments were hurt by a strengthening yen, up 17 per cent against the euro over that period.Adding to the economic burden, following the shutdown of nuclear plants in Japan, the country has increased its reliance on expensive foreign oil and gas.Japanese consumers and companies, however, are now proactively reviewing their energy usage, with energy consumption reduced by 10 to 20%.The Fukushima crisis has also prompted a national debate on nuclear energy and nuclear safety. Prime Minister Yoshihiko Noda has admitted that the government, bureaucracy, utilities and experts share the blame for being blinded by the myth of nuclear safety.He admits that Japan will have to cut its dependence on nuclear power, though the government is likely to settle for a long gradual process when it formulates a new energy policy this summer.
EU-China Partnership on Sustainable Urbanisation (Originally published 05/03/12)
Having launched the EU-China partnership on urbanisation at their summit in Beijing last month, European and Chinese policymakers, business leaders and experts are now seeking to translate their noble intentions into practical action.The potential for EU-China cooperation in creating energy-efficient “eco-cities” is immense. But so are the challenges.Beijing can probably mobilise some of the domestic resources and know-how needed to tackle the massive and difficult task of coping with its “urban billion”. To ensure the success of the enterprise, however, China will need to work with Europe and other partners.The reason is simple: although the rise of mega-cities is a phenomenon across Asia, the speed and scale of China’s urban development is unprecedented in human history. China used to be a land of villages and rural communities. It is now a largely urban country.According to China’s National Bureau of Statistics, the level of urbanisation in the country crossed the highly symbolic 50 per cent threshold last year. And the trend is far from over: according to some estimates, 350 million people will be added to China’s urban population by 2030.As a 2008 report on “Preparing for China’s Urban Billion” by McKinsey Global Institute points out, by 2025, China will have 221 cities with more than one million inhabitants of which 23 cities will have more than five million people. The urban economy will generate over 90 percent of China’s GDP by 2025.
CHINA’S URBAN GROWTH SO FAR (1970-2010)
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| Source: Data are from National Bureau of Statistics of the People’s Republic of China |
Overall, this augurs well for China’s sustained rise. Cities have been the major drivers of China’s impressive economic growth and - not surprisingly - urbanisation is the centrepiece of China’s 12th Five Year Plan.However, this urban expansion also poses a huge challenge for local and national leaders who must find sufficient public funding to provide social services and deal with pressure on energy resources, land, water and the environment.More is at stake. Integrating rural migrants into city life will not be easy, especially since without local residence permits (hukou), they will have limited access to basic services, including health and education.As such, as Tom Miller, Managing Editor of the China Economic Quarterly at Dragonomics points out, the expansion of China’s urban population will not automatically create a new middle class of consumers.To create energy efficient cities, China will have to reform the current fiscal system under which a large slice of locally collected taxes is sent back to the central government, leaving city authorities short of cash.Europe has made great strides in greening its cities but as illustrated by a series of EU projects, including the new EU “smart cities and communities” initiative, the quest to develop integrated sustained solutions that offer clean, secure and affordable energy to citizens is far from over.Since cities account for 70 per cent of Europe’s overall energy consumption, EU plans to ensure 20 per cent energy saving by 2020 and to develop a low-carbon economy by 2050 hinge on how quickly and successfully European cities can become more resource-efficient.
CHINA’S URBANISATION FORECAST (UP TO 2025)
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| Source: Woetzel, Jonathan, et al., Preparing for China’s Urban Billion, McKinsey Global Institute, February 2009. |
The new EU-China urbanisation partnership opens up fresh opportunities for cooperation. China and Europe can work together on building energy efficient eco-cities by sharing technology and expertise on questions like urban planning, energy supplies, energy demand management and developing “green digital cities”.Cooperation in improving the low-carbon and resource-efficient character of buildings as well as in sectors such transport and mobility, waste management as well as water and air quality is expected.Beyond such an EU-China “eco-relationship”, Europe can share its experience with China in areas such as providing pensions, health care and education for migrant workers as well as in managing rural communities.China’s urbanisation offers exporters and investors – in China, Europe and elsewhere – lucrative new markets. Europe’s green tech companies are especially well-placed to provide the technological solutions needed to tackle many of China’s urbanisation challenges.Over the years, European and Chinese mayors, architects, urban planners and industry leaders will have many opportunities to meet, identify and find solutions for common problems and priorities.The EU-China partnership on urbanisation already provides for the organisation of a first EU-China mayors’ forum this year. Other initiatives are expected.As the Shanghai Declaration published in October 2010 after the World Expo in Shanghai underlines, building “cities of harmony” requires a re-examination of the relationship between people, cities and the planet.Given the right balance, cities can be wonderlands of creativity, abundance and talent. But achieving that equilibrium will require out-of-the-box solutions and visionary global partnerships.
EU-China ties: Beyond the headlines (Originally published 10/02/12)
Expect no headline-grabbing breakthroughs at the China-EU summit in Beijing on February 14. China is unlikely to drop its strong opposition to the European Union’s Emission Trading Scheme (ETS), there will be no spectacular China-funded rescue package to ease the Eurozone sovereign debt crisis and Beijing will remain outside the international consensus on sanctions against Syria and Iran.The EU, meanwhile, will stay firm on keeping its arms embargo on China and not grant Beijing much-coveted status as a market economy.Discord on these and other issues is only part of the story, however. There is more to the EU-China relationship than meets the eye. New economic and geo-political realities are prompting both sides to sidestep old grievances, think afresh and try to seek out common ground.It is not proving easy. Traditional and new areas of disagreement - including strong divergences over China’s human rights record – have not disappeared. However, behind the headlines, Europe and China are slowly but surely building a new network of ties that bind.Mostly this is economic necessity. Europe needs all the rich friends it can get to help ease the current Eurozone debt crisis. China’s economic future depends on continued access for its exports to Europe’s large market.But both sides are also exploring new avenues for cooperation. The launch of a high-level EU-China people-to-people dialogue at the Beijing meeting is a case in point as is the start of an EU-China partnership on sustainable urbanisation.EU and Chinese officials are discussing energy questions, cyber security, water management and counter-piracy activities. Efforts to step up cooperation with China on these and other global common goods are a step in the right direction to meet key 21st Century security challenges.For the moment, however, the focus remains on economics and trade. Crucially, as the Eurozone crisis grinds on, there is heightened awareness of the expanding connections and deep interdependence between the European and Chinese economies.If both sides play their cards right, this could signal the start of a real “win-win” era.China has an interest in safeguarding the health of its biggest export market. It also needs to diversify its currency reserves. Prime Minister Wen Jiabao’s repeated assurances – given most recently during German Chancellor Angela Merkel’s visit to China – that Beijing will help Europe to fight the current crisis reflect a strong recognition that in an inter-connected world, as he put it, “helping stability in the European market is actually helping ourselves”.Meanwhile, with an eye on China’s 3.2 trillion dollar currency reserves, EU officials say enhanced cooperation with China is more than ever before a “strategic necessity”.As such, while EU Commissioners Karel De Gucht and Michel Barnier may threaten China over its restricted rules on government procurement and constraints on exports of rare earth, the EU has little interest in engaging in a damaging tit-for-tat trade confrontation with Beijing.Similarly, European fears over the political fall-out from rising Chinese investments in Europe – especially in infrastructure and utilities - are likely to ease once the phenomenon loses its novelty value. As cooler heads point out, far from “buying up” Europe, like corporates the world over, Chinese companies are looking for commercially sound and viable investments.Clearly, Europe needs to press for an equally open Chinese market both as regards European investments and European exports. But with China poised to become the EU’s largest trading partner this year, overtaking the United States, and Europe still the biggest market for Chinese exports, both sides know it is time to look beyond their daily skirmishes to the rewards inherent in building closer and stronger relationship.
Taking EU-India relations beyond trade (Originally published 08/02/12)
Negotiations on a first-ever EU-India free trade agreement are injecting much-needed excitement into Europe’s relationship with India.Despite earlier hopes, the trade deal will not be signed at the 12th EU-India summit in Delhi on February 10th. But the buzz generated by the negotiations as they enter a critical final stage is helping to lift Europe’s profile in a country which has so far kept the EU at a polite arms length.Significantly the trade talks, now into their fifth year, have helped to focus official and public attention in India on the EU – rather than individual European member states - as a global economic player.The challenge facing European policymakers is to use the shift from indifference to interest in EU-India relations to reinforce the still largely underdeveloped conversation with Delhi on non-trade questions.The change of mood is recent - but palpable on both sides. Senior Indian officials now describe the EU as a “key strategic partner”. Catherine Ashton, the EU High Representative for Foreign and Security Policy was recently in Delhi for a groundbreaking foreign policy dialogue with her Indian counterpart.With EU-India trade currently estimated at a mere 86 billion euros a year (compared to almost 400 billion euros annually with China), the free trade pact under negotiation – officially called a “Bilateral Investment and Trade Agreement” - is a good step forward in building stronger ties and increasing mutual understanding.The ongoing trade negotiations, while problematic on some key issues, have meant more regular contacts between Indian and European officials – and a clearer European understanding of the complexities of India.This is cause for some celebration. For all the talk of India’s rise and the country’s growing global clout as a member of the G20, the EU has not devoted adequate time or effort to clarify its strategic objectives and interests in the country. As such the EU-India “strategic partnership”, launched in 2004, has remained under-exploited.In part, this is the result of India’s complex landscape. According to some forecasts, the country is set to overtake China as the world’s fastest growing economic by 2050. The Asian Development Bank reckons that India’s 350 million strong middle class could grow to 1 billion in 2025. But India also has one third of the world’s poor. A major effort is therefore necessary if India is to meet the Millennium Development Goals (MDGs).As Nobel laureate Amartya Sen points out, “India has started falling behind every other South Asian country (with the partial exception of Pakistan) in terms of social indicators, even as it is doing so well in terms of per capita income.” The Indian government is paying greater attention to making development more inclusive and achieving a substantial reduction in poverty. The national focus is also on structural reforms, including better governance – especially following the Anna Hazare anti-corruption campaign in the wake of key graft scandals - and improved infrastructure. But more remains to be done.India and Europe share common values such as democracy and a preference for multilateralism. They also have common goals as regards good governance, achieving MDGs and working for global peace and stability. But the partnership is made more difficult because of divergent interests. Crucially there are different interpretations of what a strategic partnership is supposed to achieve.The EU sees it as a partnership to achieve global public goods by meeting 21st century challenges, including terrorism, proliferation of weapons of mass destruction, state failure and regional conflicts. India views its strategic partnerships with the EU and the US as a vehicle for ensuring greater worldwide prestige and political clout.There is also an inevitable dissonance between the EU as a status quo power which is often reluctant to make room for newcomers and India which is seeking great power status. The accusation is that the EU speaks the language of inclusiveness but unwilling to cede its seats and voting rights.This time, however, Europeans want to do more than talk trade with India. While in Delhi, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso will try and convince their host Indian Prime Minister Manmohan Singh to join the international sanctions regime against Iran.The EU says it is disappointed that India has not joined the large international consensus against Iran’s nuclear programme. India, however, is heavily dependent on Iranian oil to meet its growing energy needs.Venturing into relatively new political territory as regards volatile politics in South Asia, Messrs Rompuy and Barroso will also encourage recent signs of a thaw in Indian relations with Pakistan following Islamabad’s decision to grant Most Favoured Nation trade status to India and Delhi’s move to allow a World Trade Organisation (WTO) waiver on zero-tariff EU imports of Pakistani textiles.There will be discussions on climate change and signature of a declaration on enhanced cooperation on energy which will allow joint activities in areas such clean coal, energy efficiency and renewables as well as nuclear safety.Interestingly, cooperation possibilities will be explored as regards cyber security and anti-piracy operations as well as more exchanges on counter-terrorism.These initiatives are positive and should help prepare the ground for further political exchanges. However, as the FTA negotiations enter the final stretch and domestic lobbies in both India and Europe fight hard to defend their interests, the summit’s focus will inevitably be on trade.The EU is seeking a steep reduction in tariffs for export of its automobiles, wines and spirits to India. However, the proposals have met with fierce resistance from Indian manufacturers.Europeans are also pushing India to open the banking and insurance, postal, legal, accounting, maritime, security and retail sectors.European carmakers say the FTA will grant Indian-built cars immediate duty-free access to the EU but would only reduce the tariff barrier to European vehicle exports to a level of 30 per cent, which would stay intact indefinitely. Car manufacturers in India including Tata, Toyota, Maruti Suzuki, Honda, Hyundai Motor and General Motors, otherwise fierce competitors in the Indian market, have joined ranks to resist what they fear will be a flood of imported European cars into the Indian market.These and other disagreements will inevitably be sorted out in the coming months. Once the FTA is completed, the EU and India must pay increased attention to other aspects of their relations. Both sides can set key priorities which meet India’s requirements as a dynamic emerging power but a country which is also struggling to combat poverty and exclusion.As India rises along with the rest of Asia, it deserves stronger EU recognition as a regional and global power, not just an expanding market for EU exports and investments.
Democracy is hard work, says Indonesian leader (13/12/11)
For a quick insight into Indonesia’s ambitions of exerting regional power and global influence, visit Bali in December when the laid-back luxury beach resort morphs into an animated hub of discussion and debate on democracy, human rights and the rule of law.Delegates to the Bali Democracy Forum are a motley crew: the meeting held last week brought together representatives from over 80 countries and hundreds of observers. The conference’s title – “Enhancing Democratic Participation in a Changing World: Responding to Democratic Voices” – may not be catchy and some of the speeches were tedious. But the message from Indonesian President Susilo Bambang Yudhoyono remains strong and unequivocal: Asian countries must match their economic success with democracy and political reform.The focus this year was inevitably on the Arab Spring. The Indonesian President warned that based on his country’s experience, there were no quick fixes. “It is safe to assume that in the early years, things will be more difficult before it gets better…Democratic success has to be built, earned and improvised every step of the way. Indeed elections are only one of the tools of democracy and building a mature democracy takes a lot more than holding elections.”Launched in 2008 to encourage discussion and exchange of views on democracy among Asian countries, annual meetings of the Bali Democracy Forum have become a potent exercise in Indonesian public diplomacy.The Forum has grown in credibility and prestige over the years, spotlighting Indonesia’s democratic record since the fall of President Suharto in 1998, and the country’s increasingly vocal and visible aspirations to become Asia’s prime normative power and champion of political reform and democracy.The message from Jakarta is strong and clear: Indonesia matters – in both Southeast Asian and on the global stage. The country’s new breed of gutsy and self-confident politicians and diplomats are breaking with the cautious approach of past administrations by working hard to give Indonesia a stronger regional and international voice.Indonesia’s transformation from dictatorship to a modern and robust democracy in the past decade is no modest achievement – and through the annual meetings in Bali, Indonesia wants to spread the gospel on democracy.Indonesia’s foreign policy ambitions are not new. The country has long been active on the regional and international foreign and security policy stage. However, President Yudhoyono, now serving his second and final term in office, has given a new boost to the reputation of Southeast Asia's largest economy and most populous nation, successfully portraying it as one of Asia’s most exciting countries with constructive contributions to make within the region and on the global stage.Helped by men like former foreign minister Hassan Wirajuda, Indonesian diplomacy is now in full gear, its officials no longer content to watch from the sidelines as regional and world leaders step up engagement with China and India.Mr Wirajuda, a gentle and affable man, with a sweeping vision and experience of the world tells me in Bali that Indonesia wants to share its experience with Arab countries in transition. “WE can learn from each others’ mistakes,” he says.The focus has to be on social justice, on fighting corruption on not allowing a monopoly of power. “Governments have to be sensitive to the aspirations of the people,” he underlines.Significantly, Turkey, seen as a model for mixing Islam and democracy, was also present at the Bali meeting.In the last few years, Indonesia has taken its place in the G20, become a force to be reckoned with in the Association of Southeast Asian Nations (ASEAN) and adopted a moderating role within the Organisation of the Islamic Conference (OIC).Jakarta’s efforts at fighting terrorism and radicalization are watched carefully by its neighbours as well as the United States and the European Union.Long-term prospects are bright. Indonesia’s economic growth rates – expected to remain around the 6 per cent mark in the near future – continue to impress. Demographics are excellent; 44% of its population is under 24, meaning a growing workforce in years to come. Basic literacy rates are at 90% (although education still needs a lot of investment). The country is resource-rich. It's a major exporter of soft commodities such as palm oil, cocoa and coffee, as well as coal.But it's not just a geared play on commodities. The economy is mostly driven by domestic demand, with consumption accounting for around 60% of GDP. Indonesia is also strategically located: half of world trade passes by its northern maritime border, giving the country a strategic role in ensuring safe and secure international navigation.Small wonder then that US President Barack Obama, Chinese President Wen Jiabao, Indian Prime Minister Manmohan Singh and Australian Prime Minister Julia Gillard are among leaders who have recently trod the red carpet in Jakarta. The US and Australia are seeking to sign ambitious cooperation pacts aimed at enhancing ties with Indonesia, clearly seeing the country as a counter-weight to China's growing influence in the region.As the driving force behind many Asian regional integration initiatives. Indonesia is often held up as an example to be followed by neighbouring Burma/Myanmar, a role that Jakarta does not shun.To fulfill its regional and global ambitions, however, Indonesia will have to put its domestic house in order. Indonesians tell me the country remains riddled by corruption and religious extremism is still a problem. Few doubt that Indonesia needs to make faster progress in addressing issues like freedom of expression, military reform, police brutality (especially in Papua), treatment in prisons and of minorities.“We remain vigilant as Indonesia is not totally free from the prospect of new communal conflicts flaring up,” the Indonesian President told delegates at the Bali Forum, adding: “The more we guarantee human rights for our citizens, the more durable our democracy will become.” It is a lesson for many countries, not just those living through the so-called “Arab Spring”.
America’s focus on Asia is a “wake up call” for Europe (Originally published02/12/11)
America’s focus on the Asia-Pacific appears to have acted as a much-needed wake-up call for the European Union. Over the coming months, EU policymakers are expected to take a closer look at Europe’s relations with Asia and hopefully come up with a new blueprint for invigorating flagging Europe-Asia ties.There is much to be done. Having failed to forge real “strategic partnerships” with the region’s rising powers, the 27-nation EU has long-focused on a limited trade-only agenda with most Asian nations. Trade and economic ties do certainly bind and foster inter-dependence. But the economic link has not resulted in stronger Europe-Asia political relations or joint action to tackle key 21st Century challenges.EU-Asia security links are practically non-existent. After a successful peace monitoring mission in Aceh in 2005-2006, the EU has steered clear of any security-related initiatives in Asia. Recently, Asian and European countries have cooperated in anti-piracy operations off the coast of Somalia action in Asia. But this is of course eclipsed by the US military presence in Asia – and President Barack Obama’s recent decision to send more troops to Australia.The US clearly believes this is the “Asia Pacific Century”. During his nine-day sweep through the region, President Obama hosted an Asia Pacific Economic Cooperation (APEC) forum in Hawaii, went to Australia, took up America’s seat at the East Asia Summit in Bali and sent tough signals to China in its backyard. He also dispatched US Secretary of State Hillary Clinton to Burma on a breakthrough mission to assess moves towards democracy in the country.Countries in the region are eager for America’s presence and influence, often as a counter to China. The US President stressed in a speech to the Australian parliament that the troop buildup was not aimed at China. China’s defense ministry has warned, however, that plans to build up a U.S. military presence in Australia are a continuation of “Cold War thinking” that could destabilize the Asia-Pacific region.Certainly, no European leader can create the same buzz in Asia as the US President. The problem is that most Europeans do not even try.True, the EU has long talked of building strong strategic relations with Asia’s emerging powers. But the rhetoric remains just that: EU ties with China, India, Indonesia and the region’s other rising nations remain lackluster and uninspiring. EU and Asian leaders meet for high-level summits, ministerial encounters and issue wordy communiques. But handshakes and photo opportunities are no substitute for policy and strategic thinking.In dealing with ascending Asia, the EU would be well advised to take a page or two from the US strategy towards the region. America’s renewed commitment to the Asia-Pacific offers Europe an opportunity to learn from - and possibly participate in - what is certain to become a vibrant transpacific partnership.Competition with the US for influence and visibility in Asia has long driven EU policy in the region. EU leaders launched ASEM (Asia Europe Meeting) as a platform for dialogue with Asian countries in 1996, largely as a response to APEC. EU policymakers often gauge their success or failure in Asia by comparing European trade or business flows with America’s economic presence in the region.And since the US – and Russia – participated in the latest East Asia Summit, the EU is stepping up pressure on Asian governments to be given entry into the influential club.A new transpacific alliance could therefore provide the spur Europe needs to get its own act together in Asia.Dealing with a changing and rising Asia will require that the EU engages in new courtships and new alliances with countries in the region.However, European policymakers have not been as good at doing their homework on Asia as their American counterparts. Even as Hillary Clinton promises substantially increased investment - diplomatic, economic, strategic, and otherwise - in the Asia-Pacific region in the coming years, Catherine Ashton, the EU’s high representative for foreign and security policy, has yet to set out a convincing blueprint for relations with Asia.In fact, apart from trips to China, Ashton is a rare visitor to the rest of the continent. Her decision to stay away from the ASEAN Regional Forum (ARF) in Bali, Indonesia in July this year, for a second year running, was a serious diplomatic faux pas.Asians saw Ashton’s absence from ARF as a snub and yet another signal that, apart from a focus on China, Europe is not really interested in the region. Many Asian analysts warn that Europe is becoming increasing irrelevant in Asia. And they insist that if Europeans are serious about joining the EAS, they should stop talking and – like the Americans - start proving they are serious about stepping up political engagement with Asia.Turning EU rhetoric into action can begin with four easy steps:For starters, senior EU officials can stop playing hard-to-get and start attending key Asian meetings taking place in the region.The European External Action Service should hammer out a revamped, up-to-date agenda for EU-Asia cooperation which goes beyond trade and business. EU negotiations on free trade agreements with Asian countries are a positive step forward in helping to enhance economic ties. But trade policy, however active, cannot replace foreign policy.EU policymakers need to engage in some serious reflection, based on input from independent researchers, think tanks, academics, business leaders and other non-state actors, from both Europe and Asia, on how to get Europe-Asia ties on a more dynamic track. Like the Americans, Europeans must engage more actively with independent think tanks working on Asia.Again, like the Americans, the EU should become an active partner in the increasingly important security discussions in Asia, including within ARF and other fora.Once it has stepped up engagement with Asian countries, the EU will be in a position to make a credible bid to join a transpacific dialogue. After all, Europe’s cooperation is essential in tackling today’s global challenges.
Asia, Europe and One Health (Originally published 10/11/11)
With the world population now estimated at 7 billion, international attention has focused on the impact of the rising population on the battle against poverty, global food security and climate change. A more crowded world is also likely to be more vulnerable to emerging and rapidly-spreading infectious diseases.Recent health crises such as SARS (Severe Acute Respiratory Syndrome) and the avian influenza epidemic have highlighted the intricate relationships and linkages between people, animals and ecosystems as well as the ease and rapidity with which diseases travel across borders.Tackling epidemics and pandemics in today’s globalised world clearly requires international cooperation. With a majority of human infectious diseases commonly attributed to have originated in animals, working across disciplines is also necessary.Asian and European governments are committed to integrating the One Health approach, which seeks to promote, improve, and defend the health and well-being of all species, into their policies.The European Union has set up a new animal health strategy and initiated joint infectious diseases research programmes in key areas such as vector-borne diseases, vaccine development and neglected zoonoses (diseases transmitted from animals to humans).Meanwhile, the Association of Southeast Asian Nations (ASEAN) is playing a leading role in regional arrangements involving animal and human health sectors, in particular, in terms of how to respond to outbreaks of infectious diseases at a regional level.Having made an early pledge to integrate the "One Health" approach in its regional mechanisms, ASEAN is already committed to going beyond animal health, towards the human health and environmental sectors. ASEAN is also taking into consideration the influence of other sectors such as education, infrastructure, trade and tourism.Recent health crises have in fact encouraged ASEAN members to work together at a regional level. In addition, ASEAN Plus Three (China, Japan, and Republic of Korea) have developed the Emerging Infectious Diseases Programme to tackle pandemics such as SARS and avian flu.The 2007-2011 Strategy for Regional EU-Asia Cooperation sets aside a total of 48 million euros worth of EU regional funds fir health-based cross-border cooperation in Asia, combining animal and human health cooperation for the first time, in addition to the environment.A separate Highly Pathogenic Emerging and Re-emerging diseases (HPED) programme, started by the Commission in January 2010, aims to strengthen the institutional capacities of ASEAN, SAARC (South Asia Association for Regional Cooperation) and their Secretariats to control HPED and to improve epidemic and pandemic preparedness in the region in a sustainable manner.For the next three years, the Commission’s major focus will be on driving the "One Health" approach forward in tandem with its major international partners.There is potential for more Asia Europe cooperation on One Health initiatives. A recently published EU-funded study showcases ten “One Health” case studies in Asia and Europe including emergency measures to address serious outbreaks of infectious disease, community engagement projects to improve disease surveillance and control and communication strategies to change risky behaviour.The document, which also includes a catalogue of data bases covering key One Health documents, focal points and One Health programmes and activities, provides a good basis for further Asia-Europe discussion – and cooperation – on One Health initiatives.Such collaboration can be done best through the framework provided by the Asia-Europe Meeting (ASEM). An ASEM meeting on One Health is in fact planned for next year.ASEM can help combine Asia's experience in communicable diseases outbreaks with the EU's experience in institution building. Asia and Europe can learn from each other’s experience by exchanging information and “best practice”, including through collaboration between universities, research institutes and pharmaceutical companies.Better coordination of existing initiatives, projects and programmes can also be assured through the connection of a One Health ASEM network and the connection of existing data bases.
Promoting the private sector’s role in development (Originally published 04/11/11)
Official Development Assistance (ODA) from rich industrialised countries to poorer developing nations was once considered pivotal in achieving growth and development. Official north-south financial flows remain a vital factor in the combat against poverty. In the 21st Century, however, the global architecture of development cooperation is changing rapidly.The ranks of official donors now include newly industrialised countries like South Korea and emerging economies such as China, India and Brazil. Significantly also, development cooperation is no longer the exclusive preserve of governments. Private actors have emerged as key aid donors, with private aid – including aid provided by foundations, corporations, non-governmental organisations, and individuals – increasing rapidly over the past decade.In addition to bringing additional capital, these new actors are also injecting fresh know how and innovative ideas into development cooperation. Official and private aid can complement each other and it is increasingly important that official and private donors work together to promote development.The emergence of private actors as a leading source of development assistance is good news. With many Western governments implementing austerity measures, significant cutbacks expected in ODA – making it ever more difficult to meet the United Nations’ 0.7 percent of GDP as aid target - and public opinion in industrialised states grappling with “donor fatigue”, the mobilisation of private sector funds for fighting poverty is significant.The focus on non-state actors has coincided with the emergence of new global challenges such as combating climate change, averting global health pandemics and securing international peace.Taking on these and other tasks requires innovative responses and expertise which can be provided by the private sector. Recognising the added value of private donors, national governments and international development agencies (IDAs) have started to work closely with the private sector to mobilise investments for sectors such as healthcare, water and sanitation, agriculture, and financial services, including microcredit and micro-insurance.Private actors bring in a new dynamic, new money, new approaches and new solutions to key challenges facing developing nations. But private development assistance (PDA) is no panacea – and certainly no substitute for ODA. In fact, private assistance may - in some cases – even undermine the effectiveness and efficiency of the development landscape, thereby impacting negatively on the sustainable development of poor countries.The Development Aid Committee of the Organisation of Economic Cooperation for Development (DAC) is seeking to remedy this by ensuring that the private sector is involved in the debate on development effectiveness.Clearly, given the array of challenges facing donors and developing nations, it is essential that private and public actors in development cooperation work with each other to ensure that assistance is used most efficiently and effectively.Development cooperation actors need to undertake a thorough review of their experiences to date on public-private cooperation to chart a course for the future. They should take a closer look at the potential for synergies and conflicts of interest and evaluate past successes to understand just what works and what does not. This is essential if successful cooperation projects are to be up scaled and replicated.The focus should also be on more information and research, evaluation and transparency to ensure that PDA is subjected to the same rigorous conditions as ODA currently is. Private development assistance actors must find a way to make their efforts sustainable and must ensure the involvement of local actors in the planning and delivery of their assistance.
In keeping with the increased role of the private sector, the debate on aid effectiveness should be enlarged to include “development effectiveness”. Common principles also need to be agreed to promote greater cooperation between the public and private sectors, with the objective of increasing the understanding of the respective contributions towards common development objectives, building on existing initiatives.In partnering with governments and international agencies, private and public donors should agree on common development outcomes and engage with each other in transparent and inclusive dialogues on their priorities.The “revolution” that non-state actors have triggered in international development cooperation, through their individual actions and through coalitions and alliances with other private donors as well as with official aid agencies, is significant. The current aid revolution should therefore be welcomed – but also closely monitored.
Asia 2050: Hopes and Challenges (Originally published 05/10/11)
For insight into the historic changes taking place in Asia, read and compare the Asian Development Bank’s recent ground-breaking report (Asia 2050: Realising the Asian Century) tracking Asia’s seemingly unstoppable rise with the World Bank’s seminal study on The East Asian Miracle published in 1993.East Asia’s eight turbo-charged power houses described by the World Bank two decades ago have now been joined by China – the biggest development story in the world today and the region’s dominant economy. India, while not an East Asian state, is part of the region’s growth trajectory as are Australia and New Zealand.The East Asian Miracle pointed to strong fundamentals, international integration, and good government as the key factors of success in East Asia. But it all came crashing down a few years later as the region was brought to its knees by the 1997-1998 financial crises. Complaints about corruption, nepotism, poor financial regulation and more dominated the headlines. The region was expected to lose years of growth. Asia faltered but it did not fail.The recovery has been difficult but relatively rapid as governments got serious about putting their houses in order. Today Asia is doing better than anticipated and the region has – so far – managed to escape relatively unscathed from the slowdown affecting Europe and the US.As the ADB underlines, if Asia’s march to prosperity, being led by seven economies with more than 3 billion people between them – China, India, Indonesia, Japan, South Korea, Thailand and Malaysia - continues apace, there will be some 3 billion additional affluent Asians by 2050. Asia’s combined GDP – also including poor nations such as Laos and Pakistan – will rise from 17 trillion dollars last year to 174 trillion dollars in 2050. In short, Asia will retain the dominant economic position it held 300 years ago.But Asia’s ascendance is not set in stone. Countries could slip and stumble into a middle income trap of stagnation and slow growth. And even as we celebrate rising Asia, it cannot be forgotten that the region is still home to almost half the world's absolute poor, who earn less than 1.25 dollars a day.
Emerging economies face the risk of being stuck in the "middle-income trap" as bursts of rapid growth, driven by export-based manufacturing, are followed by periods of stagnation or decline.
There are other key challenges -- rising inequality within and between countries, poor governance and corruption in many of them, and intensifying regional competition for finite natural resources.
In the worst case, according to the ADB, Asia could face “a perfect storm” of bad macro-economic policies, unchecked financial sector exuberance, conflict, climate change, natural disasters, changing demography and weak governance.
To make Asian growth sustainable, the study says, countries must address poverty, equality of access and opportunity, and focus on education, entrepreneurship, innovation and technological development. Massive urbanization will need to be tackled.
Climate change is “a wild card for Asian development”, warns the study, which stresses that Asia is already hit by more storms, floods and other natural disasters than any other region.
Asia must retool its institutions to ensure transparency, accountability and predictability in order to respond to demands for greater voice and participation in government being made by an expanding middle class.
Significantly, regional cooperation and integration are seen as vital for Asia’s continuing rise. The ADB also correctly insists that Asia will need to take greater ownership of the “global commons” and transform itself from a passive onlooker in the debate on global rule maker to an active debater and constructive rule maker.
Changes in Asia are impacting not only on the region itself but across the world. The United States is stepping up its engagement with all major Asian actors. In fact, if any thing China’s economic rise has increased other Asian countries search for closer military and security links with the US.
Is there a role for Europe in the Asian Century? Certainly, Europe has strong historical, cultural and economic ties with Asian countries. However, as pointed out in a Friends of Europe policy briefing and conference held in June 2011, enhanced Europe-Asia cooperation in the political and security spheres, requires stronger mutual understanding and a deeper knowledge of each other.
Key findings of the ADB report and Europe’s potential as a partner to help Asia maintain its growth trajectory were the subject of our breakfast debate entitled "Asia 2050: Challenges ahead" on 6 October 2011.
In Australia, Barroso must also reach out to others in Asia-Pacific (Originally published 02/09/11)
European Commission President Jose Manuel Barroso’s visit this week to Australia is good news for Europe’s still largely under-developed relationship with Canberra. If he plays his cards right, the Commission chief could also use his visit to Australia - and New Zealand - to give a much-needed boost to the EU’s lacklustre engagement with other Asia-Pacific nations.
That at least is what Australia and most Asian countries are hoping for. “We’re seeking a broader and deeper engagement with the EU on a bilateral level,” says Brendan Nelson, Australia’s Ambassador to the EU. In addition, Barroso’s visit should lead to greater understanding in Europe of the increasing political and economic importance of the Asia-Pacific and the rapid changes taking place in the region, he underlines.
The message certainly needs to be hammered home – repeatedly – in conversation with senior EU policymakers. While the rise of Asia has not gone unnoticed in European capitals and by Europe’s dynamic business sector – EU-Asia trade and investment flows are booming - the EU’s top officials appear largely indifferent to the growing political and geo-strategic clout of the region.Certainly, high-level visits to China abound. India gets a look-in occasionally. But Asians are still smarting at the decision by EU High Representative for foreign and security policy, Catherine Ashton, to stay away from the meeting in July of the ASEAN Regional Forum (ARF) which is hosted by the Association of Southeast Asian Nations (ASEAN) and brings together leading regional and global powers.As an Asia-Pacific nation seeking ever-closer integration and engagement with the region, Australia sees the ARF as an “extremely important” forum for security discussions in Asia, says Ambassador Nelson. “It is in the interest of Australia and the region that the EU engages strongly with the ARF,” he underlines.In fact, most ASEAN officials make clear that the EU’s hopes of joining the East Asia Summit, which in addition to key Asian players, now includes Russia and the US as members, is largely conditional on its performance in the ARF.Barroso’s visit to Canberra – the first such trip to the country by a Commission president in thirty years – could help ease some of Asia’s concerns about the direction of EU foreign policy. But this will require that the Commission president uses his many public appearances and speeches to reach out to the wider region.
Significantly, Australia joined the ASEM (Asia Europe Meeting) last year, highlighting its Asia-Pacific identity. And for all the focus on the US and Europe, Australia’s growing economic and political links with the Asia-Pacific region guarantee it a buoyant future.
Relations with China are clearly at the core but Australia is also forging stronger ties with India, Indonesia, Vietnam and Japan, countries which provide an expanding market for Australian exports, mainly of commodities. Integration with rising Asia helps explain the increase in Australian incomes in the last two decades and the country’s still-strong economic performance.Relations between the EU and Australia have been improving rapidly in recent years, with earlier tensions over agriculture and trade now part of an almost-forgotten past. That “narrow” agenda has now been widened to include plans to sign an EU-Australia Partnership Framework which will make Australia a “tier one” partner for Europe, says Ambassador Nelson.The agreement, expected to be signed later this year, will allow for regular senior-level contacts between the two sides and closer consultation on foreign policy and international security issues as well as global trade and climate change.With Baroness Ashton also expected to be in Australia in late October to attend a high-level Commonwealth meeting, the EU should not miss the opportunity to use the new focus on Australia to build bridges with an increasingly EU-sceptical Asia-Pacific.
US lessons for EU-Asia ties (Originally published 18/07/11)
European Union policymakers seeking a seat for Europe at the East Asia Summit, the region’s leading security forum, should stop talking and start proving they are serious about stepping up political engagement with Asia.Turning EU rhetoric into action can begin with three easy steps.For starters, senior EU officials can stop playing hard-to-get and start attending key Asian meetings taking place in the region.The decision by Catherine Ashton, the EU high representative for foreign affairs and security policy, not to attend the ASEAN Regional Forum (ARF) in Bali, Indonesia on July 22-23 for a second year running is a serious diplomatic faux pas.Asians see it as a snub and yet another signal that, apart from a focus on China, Europe is not really interested in the region. Britain and Germany are understandably not too pleased with Ashton’s decision either.The fact that Ashton’s acting “deputy”, Polish Foreign Minister Radoslaw Sikorski, is also not going to the ARF makes things worse. The task of representing the EU at the ARF top table has apparently fallen to Elzbieta Bienkowska, Poland’s minister for regional development.Protocol-conscious Asians are not amused. If the Baroness is too busy, say Asian diplomats, she could have asked the much-respected Kristalina Georgieva,EU Commissioner for international cooperation, humanitarian aid and crisis response, affairs, to attend the ASEAN Forum.True, the EU held its own Asia Europe Meeting (ASEM) with Asian foreign ministers in Hungary in June. But by shying away from travel to Asia, Ashton and others are reinforcing the impression of EU neglect and indifference.Correcting this perception will not be easy. As a result, Europe may have to wait a long time for that much-coveted seat at the East Asia Summit which, in addition to key regional players such as Japan and Australia, now also includes both the US and Russia.Second, the European External Action Service should hammer out a revamped, up-to-date agenda for EU-Asia cooperation which goes beyond trade and business. EU negotiations on free trade agreements with Asian countries are a positive step forward in helping to enhance economic ties. But trade policy, however active, is no substitute for foreign policy.EU policymakers need to engage in some serious reflection, based on input from independent researchers, think tanks, academics, business leaders and other non-state actors, from both Europe and Asia, on how to get Europe-Asia ties on amore dynamic track. The conference “Europe and the Asian Century”, organised by Friends of Europe on June 21, highlighted several areas for future engagement between the two regions.European institutions still tend to be wary of advice from “outsiders”. As a result, EU policy on Asia has failed to adapt to Asia’s changing political, economic and social landscape. Like the Americans, Europeans must engage more actively with independent think tanks working on Asia.Third, like the Americans – and increasingly, the Russians - the EU should become an active partner in the increasingly important security discussions in Asia, including within ARF, the annual security-focused gathering of Asian foreign ministers and their key foreign partners.As she did last year, US Secretary of State Hillary Clinton is going to the ARF meeting and the other encounters organised around the Forum, including a preparatory meeting of the East Asia Summit which will be held in Bali on November 19, with President Barack Obama in attendance.US officials make clear that Clinton makes a point of “showing up” at Asian gatherings to prove America’s “sustained commitment” to the region and to enhance its strategic engagement with Asian countries, especially ASEAN members.The ARF agenda is impressive, including discussions on easing the ongoing border conflict between Cambodia and Thailand, tensions in the Korean Peninsula (with the reclusive North Korea making a rare appearance on the international stage by sending its Foreign Minister Pak Ui-Chun attends to the Bali meeting)and conflicting territorial claims in the South China Sea.Missing meetings may appear trivial to a harried and rushed EU foreign policy chief who has to deal with myriad pressing issues, including some in Europe's immediate neighbourhood. But diplomacy is about travel, networking and trying to influence and shape policies and perceptions.For too many years – with the exception of Javier Solana, the former EU high representative for foreign and security policy - EU commissioners and ministers have either stayed away from meetings with their Asian counterparts or put in a brief, formal appearance. Opportunities for dialogue and networking were missed. Personal relationships have not been nurtured.Dealing with a changing and rising Asia will require that the EU engages in new courtships and new alliances. If the EU wants a seat at the East Asia Summit, senior European diplomats will have to learn to engage more actively and more constructively with rising Asia.
ASEM to discuss non-traditional security threats (Originally published 01/06/11)
Asia Europe Meetings meetings have so far focused on traditional threats to global and regional security, including the North Korean and Iranian nuclear programes, the Arab-Israel conflict and the situation in Afghanistan.But while world peace is still threatened by inter-state wars and military conflicts, competition for access to food and energy resources, water disputes, health pandemics and terrorism are emerging as equally potent threats to global security.They are also becoming increasingly central to the evolving international security agenda.“Non-traditional” security challenges are not new. In a rapidly globalizing and interdependent world, however, their impact can be felt not only within countries but also on a regional and international level.They spread fast – and if left to fester, can cause enormous societal havoc and regional and global tensions.ASEM foreign ministers’ discussions in Budapest on June 6-7, on “non-traditional” security issuesare therefore a good step forward in fostering stronger Asia-Europe engagement on tackling key 21stCentury challenges.Hungary, the current presidency of the 27-nation European Union and host of the ASEM meeting, has said foreign ministers will look at questions like energy security, food security, water security and supply, climate change, terrorism as well as disaster preparedness and management.In an increasingly interconnected world, made smaller through increased trade and improved technology, unilateral action cannot effectively deal with these new challenges. Multilateral responses, including within the ASEM framework, are therefore important.As a platform for informal exchange and discussion, ASEM is ideally suited to explore the nature, scope and fall-out of the new security challenges. ASEM also allowsthe sharing of experiences and expertise on possible solutions and coping mechanisms.The new, non-military security threats share some common features: they are transnational (that is neither purely domestic nor purely inter-state), emerge quickly and spread rapidly – within countries and on the regional and global levels.In addition to their impact on people, they can also have a far-reaching economic impact – on individual countries and on the global stage.The SARS (Severe Acute Respiratory Syndrome) epidemic in 2002, the “Avian flu” in 2007 as well as HIV/AIDS are examples of how quickly diseases can spread in an era of rapid inter-continental travel, prompting not only human tragedy but also devastating countries’ health sectors and economies.Asian countries are aware that the region’s recurring problem of haze caused by environmental pollution and forest fires can exact a very high price in terms of human security as well as cause damage to health systems and the economy.Today, rising food prices are increasing inflationary pressures in many parts of the world while also stirring social unrest and impacting on progress made so far in achieving the Millennium Development Goals (MDGs).Asian and European countries have some experience in joint action to tackle food security, disaster response, piracy at sea and terrorism.Rising food prices were discussed at an ASEM meeting held in Hanoi last month.At the ASEM 8 summit last year, leaders agreed to an increased sharing of intelligence to track down and stop the funding of piracy operations off the coast of Somalia and stressed the need to prosecute suspected pirates.They also asked countries to criminalize piracy and armed robbery at sea in national legislations.The EUNAVFOR Atalanta mission, launched in December 2008 and counting up to 12 ships and patrol aircraft supplied by Italy, the Netherlands, Germany, France, Spain, Belgium, Luxembourg and Greece, as well as non-EU member Norway, patrols the Gulf of Aden and Somali Basin waters in conjunction with other anti-piracy missions operated by NATO and several Asian countries.ASEM experts on counter-terrorism and disaster-management meet regularly.However, more work is needed to identify and prioritise the new dangers, select institutions for responding to the expanding security agenda and work out linkages between traditional and non-traditional threats.Addressing human security issues will require that solutions are people-based, multilateral, and involve government, business and civil society.By providing an example of such multilateral cooperation, ASEM can help craft a new 21st Century global security agenda.
Time for Asia-Europe cooperation on food security (Originally published 06/05/11)
Asian and European policymakers meet in Chiang Mai, Thailand, next week for talks on food security amid fears that currently volatile food prices could trigger a new “food price shock” similar to the food crisis in 2006-2008.Rising food prices are spurring inflation and unease in Europe - but Asia is especially vulnerable. The region’s poor families spend over 60 per cent of their income on food compared to 10 per cent spent in developed nations. The rising cost of food is hurting Asia’s rural poor and urban middle classes.The Asian Development Bank has warned that a sustained 10 per cent rise in domestic food prices in developing Asia, home to 3.3 billion people, could push an additional 64 million people into extreme poverty. Recent gains in poverty reduction made in Asia could be seriously undermined.The statement echoed similar warnings made earlier in the year by World Bank President Robert B. Zoellick that “more people could become poor because of high and volatile prices.”The meeting in Chiang Mai on May 9 and 10 provides an opportunity for enhanced Asia-Europe cooperation to help defuse current uncertainties and improve global food security.Using the platform provided by ASEM, Asian and European countries can share experiences, exchange best practice and undertake joint initiatives to tackle the array of factors responsible for the rising cost of food.There is no dearth of issues to discuss. The 48 ASEM partners, including food producers, exporters and importers, must work together to improve farmers’ livelihoods, ensure sustainable agricultural and food production, encourage “responsible” agricultural investment and strengthen agricultural research.Sharing agricultural innovations and promoting technology transfers are important. Countries must work together to provide for food security arrangements in case of emergencies and share information on food security.ASEM members need a frank discussion on the many factors responsible for the current situation. Bad weather, including floods in Australia and Pakistan and increasing oil prices (immediately affecting the price of fertiliser) – worsened to some extent by the political turmoil in the Middle East – are clearly contributing to the problem.Countries’ efforts to reduce their dependence on oil by producing crops for fuel rather than food, can also impact on prices. Increases in population and added demand for more food by the world’s rapidly growing emerging countries – many of which are Asian – have further contributed to the pressure on food prices. An increase in the cost of farm inputs such as fertilisers and speculation in the futures market is aggravating the situation.To come to grips with the problem, governments need to focus attention on strengthening entire food systems from farm production, processing, retail and distribution to consumption. There must be increased emphasis on agricultural research which can increase crop yields.It is a daunting task requiring national initiatives but also collective action. The 10-member Association of Southeast Asian Nations has agreed, through the ASEAN Integrated Food Security Framework, to establish an emergency regional rice reserve system.The European Union is also well-placed to provide its experience and expertise to Asian countries. Once criticised for its system of costly farm subsidies and high farm tariffs, the EU has revamped its common agricultural policy and thanks to efficient and modern farming techniques, remains a leading exporter and importer of food products.The European Commission, the EU’s executive arm, spends about 600 million euros a year on food security projects and programmes in developing countries.An EU food facility worth one billion euros is under implementation as a rapid response to the 2008 food crisis in developing countries. Most of the projects are expected to be completed by end-2011.With experts warning that if food and fuel prices continue to surge, economic growth in the Asian region could be reduced by up to 1.5% this year, the stakes are high for ASEM. In an inter-dependent world, changes in Asia’s growth prospects will have a strong impact on European economies.As a paper prepared for the ASEM meeting in Chiang Mai underlines, “Food security has become a serious challenge for our communities.” As such, it requires joint Asia-Europe action.
Time for a new EU-ASEAN strategy (Originally published 12/04/11)
As the Association of Southeast Asian Nations (ASEAN) rises along with the rest of Asia – in some cases notching up even stronger growth rates than Asia’s other booming economies – EU policymakers must step up engage with Asia’s oldest, but newly-re-energised, region-wide power.The EU has provided technical help and expertise to ASEAN’s regional integration efforts for many decades. Trade, aid and investment relations between the two sides are booming. With a combined GDP of around US$700 billion and a market of more than 550 million people, ASEAN offers great economic opportunities for European business.However, stronger business ties need to be buttressed by a supportive political environment. As such, Europeans must ensure their political and security relations keep pace with rapid changes in ASEAN and Southeast Asia’s growing global clout.If the EU is serious about restoring its credibility and influence in Asia, it must look beyond relations with China and India and develop a new strategy for engaging with a re-vitalised and vibrant ASEAN. Failure to do so could mean being excluded from an array of exciting new multilateral initiatives on issues like climate change, immigration and food security. A lack of political engagement could also act as a brake on the further development of EU-ASEAN economic ties.The 10-member ASEAN certainly has a new spring in its step. Growth rates are high, plans for ASEAN economic integration are picking up momentum, Timor Leste is set to become the newest member of the organisation and ASEAN is in the driver’s seat of an array of free trade and regional integration initiatives spanning the continent. G20 member Indonesia, as current chair of the organisation, is expected to give ASEAN an even stronger international profile.Significant challenges remain, however. The Jakarta-based ASEAN Secretariat remains weak, cash-strapped and under-staffed. The organisation’s member states include a disparate mix of emerging economic giants and some of the world’s poorest nations as well as democracies, monarchies and authoritarian governments. ASEAN experts warn of a “democratic recession” in the region, pointing out that even Indonesia, the world’s third biggest democracy after India and the United States, is “flawed”. Border disputes such as the recent flare-up between Cambodia and Thailand pose a serious challenge to ASEAN’s credentials as peace-maker.After a slow start, the pace of ASEAN regional integration is picking up. The six major ASEAN countries (comprising Indonesia, Malaysia, the Philippines, Singapore, Brunei and Thailand) have rebounded from the global economic crisis. The region stands determinedly at the centre of a host of ambitious pan-Asian trade and political networks, emerging as a strong third pillar in a region dominated by new economic powerhouses China and India.Expectations are high as regards Indonesia’s current chairmanship of the organisation. Indonesian Foreign Minister Marty Natalegawa has said he intends to focus on making progress toward the fulfilment of the ASEAN Community, establishing a “dynamic equilibrium” between ASEAN and the world’s major powers and increasing ASEAN’s role in the global community of nations.As ASEAN’s oldest Dialogue Partner, the EU has provided help and expertise to ASEAN’s regional integration efforts. The EU-ASEAN relationship has, however, turned lacklustre with time; today it is in dire need of a new lease of life.The first ever ASEAN-EU Business Summit to be held in Jakarta in early May could provide some of the much-needed impetus. Bilateral economic and trade agreements that the EU is seeking to negotiate with Singapore and Malaysia as well as the Philippines, Vietnam and possibly Brunei, will also help boost relations. But such initiatives are not enough. The EU needs to take a leaf from the US foreign policy book by taking its engagement with ASEAN to a higher level.Giving more impetus to EU-ASEAN relations will require a fresh look at the region, a focus on security and political issues of interest to ASEAN as well as initiatives such as visa-free travel for business leaders. Once the current EU review of strategic partnerships is complete, policymakers should consider making ASEAN a strategic partner, on a par with China and India.Interestingly, not unlike the EU, ASEAN is entangled in a debate on whether to widen or deepen its membership. ASEAN also faces a tough balancing act in its relationship with China. Traditionally ASEAN’s closest ally, the US under the Obama Administration has become an even stronger guarantor of the region’s security. Australia and Japan are drawing ever closer to ASEAN.As Europe struggles to rebuild its economy, it needs to trade and investment more in one of the world’s most dynamic regions. It cannot afford to remain on the periphery of ASEAN’s expanding ring of friends.
Tigers, jaguars and global growth (Originally published 14/03/11)
The impact of Asia’s rise on the European Union and the United States dominates world headlines. The focus is also often on the pros and cons of China’s growing presence in Africa. Lost in the reports is mention of Latin America’s booming economies – and the role played by ascending Asia in helping to transform the region.Latin America is rapidly emerging as a global economic power. And deepening economic links between Asia’s booming economies and Latin America have been pivotal in driving forward this evolution.This is clearly good news for both regions – and for the global economy. Increasing trade connections between Asia and Latin America have helped shelter both regions from the worst effects of the economic crisis affecting the US and the EU.The EU and the US have long urged developing countries to step up “south-south” trade to boost global trade flows, help create new jobs, raise revenues and diversify export patterns.Until recently, however, globalisation was all about growing links between industrialised and emerging nations. Today, however, it’s the integration of emerging markets that has become a major engine of world growth.China is of course spearheading the drive. “Latin America is looking towards China and Asia – and China and Asia are looking right back,” underlined the Organisation for Economic Cooperation and Development (OECD) in a report published in 2008.But other Asian countries including Japan, South Korea and India, are also expanding their presence in Latin America. The Inter-American Development Bank says Asian trade with the region topped 256 billion US dollars in 2010 –more than Latin America’s annual trade with the EU and more than half of its trade with the US. China has displaced the US as Brazil’s top trading partner.The World Trade Organisation (WTO) estimates intra-emerging market trade rose on average by 18 per cent per year from 2000 to 2008, faster than commerce between emerging and industrialised nations. It totalled 2.8 trillion US dollars in 2008, about half of emerging-market trade with all countries.The rise in south-south trade is impressive. Chinese exports to other emerging markets, accounted for 9.5 per cent of GDP in 2008, compared with 2 per cent in 1985. India’s exports rose to 7.3 per cent from 1.5 per cent and Brazil’s almost doubled to 6.3 per cent.It’s no secret; Asians are interested in Latin America’s natural resources. Commodity exports from Latin America to are thriving and likely to become even more buoyant as new highways being built across Latin America from the Atlantic to the Pacific oceans open up new trade routes to Asia.Latin America is also an attractive market for Asia’s green technology firms. Indian pharmaceutical companies have started factories and joint ventures in Lain America and that produce millions of dollars worth of lost-cost generic drugs. Capital goods represent an estimated 54 per cent of Brazilian imports from China.There is undoubtedly trade rivalry between the two regions as low-cost Asian manufactured goods compete with Latin America’s industrial products both in the region itself and on the global stage.Asia and Latin American have so far dealt with such friction in a non-confrontational manner. Both sides have a vital interest in pushing for more dynamic south-south trade and investment flows. So does the rest of the world.
EUROPE’S BURMA SANCTIONS DILEMMA (Originally published 16/02/11)
European Union governments are set for weeks of difficult debate ahead of a planned review of long-standing sanctions against Burma/Myanmar on April 30. EU policymakers should take a deep breath: the discussion, difficult and emotional at the best of times, has become even more complex – and urgent - following the release in November last year of opposition leader and Nobel laureate Aung San Suu Kyi, the organization of elections in the country and the establishment of a new civilian government headed by Thein Sein.Critics say the elections were rigged and the military’s hold on power remains undiminished. Those pressing for a more pragmatic approach insist, however, that changed circumstances in Burma, as well as the growing influence of China and India in the country, demand a review of Western policy. That would entail at least a visible sign of European flexibility, possibly even a lifting of some sanctions.An EU decision would certainly be easier if Ms Suu Kyi came out clearly against restrictions. Instead, the NLD leader has been sending mixed signals, telling some reporters she wants to retain sanctions but asking foreign governments to invest in her country’s technology and infrastructure.The National League for Democracy (NLD), led by Ms Suu Kyi, recently called for talks with the US, EU, Australia and Canada on how best to modify sanctions to encourage democracy and human rights. The opposition group denied suggestions that sanctions were responsible for Myanmar’s economic plight, saying this was the result of bad government policies. The NLD Statement did not, however, spell out the reasons for their claim. And in fact, several ethnic parties and other opposition parties have publicly called for lifting of economic sanctions, saying that they do hurt ordinary people.The influential Burma lobby in Europe remains implacably opposed to any move to lift sanctions. Warnings from the new Burmese government to NLD leaders that they could meet a “tragic end” if they failed to recognise the political realities in the country, certainly do not contribute to a constructive debate.Foreign Ministers of the Association of Southeast Asian Nations (ASEAN) are pressing Washington and Brussels to lift sanctions to ensure economic development in the country. “However, it should be remembered that lifting the ban and reconciliation go hand in hand,” an ASEAN statement insisted. EU member states are divided and undecided. Catherine Ashton, the EU’s High Representative on Foreign and Security Policy, has said she will keep a close watch on how accountable the new Parliament and government will be vis-à-vis the electorate and on the government’s stance on human rights.Britain remains committed to sanctions unless Ms Suu Kyi says otherwise. However, a leaked US diplomatic cable disclosed by the Wikileaks website recently revealed that Italy, Spain and Germany were advocating an EU “re-engagement” with the Burma.EU sanctions, introduced in 1996, include an armsre embargo and a ban on sales of equipment for internal repression, targeted financial sanctions and an EU-wide travel ban for the senior members of the military regime and their family members. The EU has also withdrawn its generalised system of preferences (GSP) for Burma’s exports, motivated by forced labour. Analysts say that incidents of forced labour are confirmed, but exclusively within the armed forces. The GSP withdrawal, however, is believed to be hurting exports of textiles and fishery products. There is also an import and export ban on timber, metals and semi-precious stones and an investment ban on enterprises owned, controlled or associated with the government.Internal evaluations of the effectiveness of sanctions have been made by the EU, but never made public. They are said to paint a disastrous picture of the impact of Western economic sanctions as counterproductive on the political level and as regards impact on the people. There is concern that maintaining sanctions could limit Burma’s economic recovery and further isolate an already inward-looking regime. Certainly, while the EU is held back by sanctions, China, India and some Southeast Asian countries, are expanding their economic presence in Burma.As they prepare for the policy review, EU governments will have to consider a more balanced policy. This could mean continuing support for the charismatic Ms Suu Kyi as a victim of repression, but more circumspection in unconditionally following her views on sanctions. What’s best for the people of the country and broader geopolitical imperatives deserve a deeper analysis. It’s going to be difficult. But it’s time to start the discussion.
ASIAN LESSONS FOR THE MIDDLE EAST: AFTER CHAOS, DEMOCRACY (Originally published 09/02/11)
European and American policymakers worried about further chaos and confusion in Tunisia, Egypt and other Arab states should take a close look at the way years of authoritarian rule gave way to democracy in three leading Asian nations: Indonesia, the Philippines and South Korea.All three Asian countries went through long and difficult transition periods following the fall of entrenched, corrupt, dictators. There were riots, uncertainty and pain. The economy suffered. The army watched warily as protests spread.Today the three countries are functioning democracies, allies of the West and active participants in Asia’s rise. Historical parallels are never perfect of course; Arab countries, with their mix of disgruntled young people yearning for change, under-developed or non-existent political parties and well-organised Islamists present a complex challenge to Europe and America.Not surprisingly, ever since Tunisia’s “jasmine revolution” – and with the Iranian “Islamic revolution” circa 1979 on their minds - policymakers in Brussels and Washington have been struggling to balance their support for change and democracy with a desire for stability and continuity in the region.There is justified concern that anti-government protests could be hijacked by Islamists. But also unjustified assertions that the region is not “ready for democracy” and that chaos will be destructive and long-enduring. The West’s mixed message risks feeding a perception on the streets of Cairo and elsewhere that Europe and the US are putting stability ahead of democratic ideals and leaving hopes of nurturing peaceful, gradual change in the hands of an old guard which has little reason to speed up the process.Such sentiments do not augur well for future relations between the West and the Arab world. Better and wiser therefore to give a supportive hand, sound advice and good counsel to the real democrats than to throw a lifeline to those clinging to power.For inspiration, Arab and Western policymakers should read up on recent Indonesian history and especially the country’s successful –albeit sometimes painful - transformation to democracy following the fall of President Suharto in 1998.Also worth a read is the success of the “People Power movement” in the Philippines in 1986 which drove President Ferdinand Marcos into exile and installed Corazon Aquino as the new president. In South Korea, meanwhile, the democratic uprising of June 1987 represented a nation-wide uprising and the main goal was to make the authorities to give green light to democratisation.Despite their flaws, Indonesia, the Philippines and South Korea are proof that countries can change direction, peoples’ aspirations for democracy can be met and that chaos can give way to peace and development.For lessons on managing change and transformation, perhaps Arab and Western policymakers should stopping fretting about Iran and start consulting some of Asia’s new democracies.
THE NEED FOR A STRATEGIC EUROPEAN VISION ON ASIA (Originally published 02/02/11)
Europe and Asia have good trade and business ties but need to develop an equally dynamic and forward-looking political and security relationship. This is crucial if Europe is to become a credible partner for a rising Asia. With the structure of the new European External Action Service finally in place, it’s time to start work on a much-needed new European strategic vision for engaging with Asia.
Relations with China must be top of the agenda but EU policymakers must also look beyond the current preoccupation with Beijing. Stronger ties must be built up with India and Indonesia as well as the Association of Southeast Asian Nations (ASEAN). The EU-Japan relationship needs new momentum. A stronger EU-Asia conversation is needed on global flashpoints including Iran, North Korea and Burma as well as recent tensions in the East and South China Seas.
Discussions should focus on cooperation to manage urbanisation, develop low-carbon technology, tackle climate change, combat poverty, ensure energy security and pursue anti-piracy actions.
Free trade negotiations with Asian countries need to be pursued and more ambitious pacts covering wider economic cooperation should be explored with other countries, including Japan, which are looking for closer trade ties with the EU. EU-Asia investments must be facilitated in both directions. Discussions on easing the financial and monetary crisis are vital.
Closer ties between European and Asian civil society groups should be encouraged, with a special emphasis on reaching out to young people.
Above all, Europe must not only talk to Asia – it must also listen.
Dealing with ascendant Asia will require that the EU changes its traditional way of dealing with the region. Emerging Asian countries like China and India do not fall into neat categories of “rich” and “poor”; as such, they require sophisticated handling.
The Asia-Europe Meeting (ASEM) held in Brussels last October - attended by most Asian leaders - is proof that the majority of Asian countries want close relations with Europe, and see the EU market as vital for their domestic growth and development.
The EU's problem is simple: it has been unable to leverage its economic power in Asia into real, sustained political clout.
Dealing with a changing and rising Asia will require a change in European mindsets, new courtships and new alliances.
Correcting the view among many Asian policymakers that the EU is an irrelevant global player will take time, energy and effort. Failure to do so, however, could mean a brake on Europe’s ambitions to become a potent global actor.
It is with these challenges in mind that Friends of Europe has launched a high-profile Asia Programme which will study and analyse ascending Asia and assess the different ways in which it impacts on the European Union.
Through a range of diverse activities, including high-level conferences, seminars, roundtable discussions and publications, including policy recommendations, our new Asia Programme will strive to contribute to the development of a new EU strategy for Asia