Europe-East Asia Summit – The Forgotten Middle Kingdom
Some extraordinary men symbolize the rise of economic power in East Asia today. Today’s success can be attributed directly to outstanding leadership provided by the likes of Deng Xiaoping of China, Lee Kwan Yew of Singapore, Suharto of Indonesia, Mahathir of Malaysia, etc. This is not to discount successive successful leaders in Japan, South Korea, Thailand and even in the Crown Colony of Hong Kong, who have taken their countries pell mell into making the 21st century East Asia’s very own. Second only in size and importance to the Annual DAVOS Summit of the World Economic Forum (WEF), the Europe-East Asia Summit has become a recurring future of some note since it regularly continues to attract Heads of State and Government, business leaders, senior academics, public figures, etc not only from the region but also from Europe on a single platform to analyse and advise, this year the focus was on the strengthening of relations between Europe and East Asia, regretfully it seems, to the exclusion of all the other peoples of the world except for the North America Region.
The man who in 1965 started this present sustained economic upthrust in East Asia and who serves as a role model for other leaders in the region, indeed the whole world, to emulate, Senior Minister (SM) Lee Kuan Yew of Singapore, can best be described as a no-nonsense but benevolent Godfather whose vision combined with absolute authority gave his people economic prosperity on the foundation of political order and stability, a considerable achievement for an ethnically divisive society. Singapore’s 30 years of independence is a story of unrestrained single-mindedness dynamism that has made the world sit up and take notice, indeed the former masters are now aspiring to build bridges with those colonies that they exploited for centuries while keeping them economically subservient. It is no wonder that the SUMMIT’s focus was best enunciated by “the Rise of East Asia: Challenges and Opportunities” according to Senior Minister (SM) Lee Kuan Yew of Singapore and had at its main aim “the strengthening of the Europe-Asia Bridge” in the vision of Prime Minister Goh Chok Tong, Lee Kuan Yew’s anointed successor in Singapore.
To quote Lee Kuan Yew, “East Asia already produces 25% of the world’s output in purchasing power parity terms. Barring major upheavals, it will remain the most economically dynamic region in the world for the next 20-30 years. If East Asia grows at an annual average of 5-6% over the next three decades, its combined GDP in 2025 will be 40% of the world’s output. This would be twice as large as North America’s, or almost equal to the GDP of North America and Europe combined,” unquote. He further stated that if China continues to grow at an average 7.5-8.0% over the next two decades its GDP will be larger than that of the US by 2020, Lee Kuan Yew said that East Asia’s demand for infrastructure is gigantic, the World Bank estimating the cost for power, telephones, transport, clean water and sanitation alone at US$ 1.5 trillion by 2006 (some private sector estimates putting it closer to US$ 2 trillion). Both Lee Kuan Yew and Goh Chok Tong maintained that the global economy in the 21st century will be supported by three principal regions, namely North America, Europe and East Asia. He quoted WEF’s survey of some 1,500 leading executives around the globe who maintained that 7 of the 10 top-most competitive economies in the year 2030 are expected to come from Asia, the top being US, Japan, China, Germany, Singapore, Korea, India, Taiwan, Malaysia and Switzerland. Prime Minister Gro Harlem Brundtland of Norway while acknowledging that the west has “never experienced such economic growth, among a comparably large population in Asia, living on land and depending upon water resources which are already under stress”, said that “it was in Europe we first gained experience with high population densities and scarce water and land resources. The next century may well be one of great environmental crisis with the main pressures coming from Asia” which she asserted can make a series of timely decisions before economic growth and performance present them with the unpaid bills which overwhelm the country’s resources.
While the Summit was as usual extremely useful to the participants, it was depressing for those who inhabit the region between the developed Europe and fast developing East Asia. Between Europe and East Asia live almost 1.5 billion have-nots in the areas comprising South Asia, Central Asia and the Middle East (less the rich Arab countries). In all the euphoria of cooperation between each other both these worlds seemed to forget that we exist. As East Asia rapidly comes at par with Europe and the USA, this region, which for a better description we can call “the Forgotten Middle Kingdom”, will have increased poverty and frustration. An area of great economic potential, our overloaded infrastructure is literally crying out for refurbishing and modernisation. Despite the fact that we have two regional cooperation agreements there is no arrangement yet on cooperation, the net result is that SAARC (South Asia Association for Regional Cooperation) and ECO (Economic Cooperation Organisation) countries are going to be left far behind this new world, giving rise to frustrations and instability thereof as populations multiply and the economic pie becomes smaller. Pakistan, which is at the epicentre of both ECO and SAARC, being the only country part of both worlds, must feel this frustration more than anyone else as we have the resources, the skilled and unskilled manpower, the potential, etc, everything that is but a stable political order. Though it was not meant so, PM Goh Chak Tong in his speech at Williams College in USA, while being honoured with a doctorate, mentioned that in the early 60s Singapore was not even considered one of the Asian countries likely to become an economic powerhouse in the next few decades, top of the list was Pakistan. To add to frustration we also face humiliation at our gross failure. While India is mentioned as one of the countries likely to be the world’s top ten in the distant future, the portents are murky at best. Given that despite the best face the brilliant Sardar Manmohan Singh could give to India’s economic turnaround, he could not dispute the fact that during the previous years direct foreign investment had trickled down to US $ 1.5 billion. Contrast this with the US $ 200 billion required in the next 10 years just to build highways and bridges, where is the money to come from in the face of cancellation of projects like ENRON? Though the Indian Finance Minister evaded pointed questions by talking about environmental objections among other things, clearly reducing the impact on the media with respect to corruption (high costs, he said) ENRON will be settled as both the Maharashtra Government having made its points, and the foreign investors, raring to get on with it after making compromises, agree to a solution. While the ENRON example will not deter the determined investors, inflow of investment will be much lower than the level required. Pakistan is fortunate that the Ms Benazir Government has a very pragmatic Energy policy, and except for the odd political roadblock for the perceived opponents of the regime (which one supposes is a political right), ours is a much more attractive package with a clear unambiguous investment potential as an attraction.
PM Goh Chok Tong spelt out political order and stability as the prime cause behind Singapore’s economic miracle. The same is true in China, South Korea, Taiwan, Indonesia, Malaysia and Brunei. In ASEAN itself only Philippines stands out as not having the same economic thrust while Thailand, despite having constitutional disorder, has displayed tremendous economic progress, mainly because the monarch exudes stability at the core. When the famous verdict for Pakistan becoming an economic giant was given in the early 60s, Field Marshal Ayub Khan was providing absolute stability, thereafter the advent of democracy followed by a serious flirtation with socialism and a centrally controlled economy put us out of contention. Which brings us to the “controlled democracy” that all the Asian Tigers and their aspirant countries now have in place, the fact of the matter is that they are light years from the democracy the west prescribes for us. And as far as corruption is concerned, except for Singapore (and that is not a good role model as it is only a city-state without the problems of much larger countries having the populations like India and Pakistan), there is no other country in East Asia where corruption is not endemic and on a much larger scale than we can ever envisage. Furthermore, even today much after the economies are booming many of the infrastructure units are still tightly under State control in every one of these Asian Tigers, it is only now that evolution to the stage of strategic investors has begun. As for investment from western sources, given their attraction for East Asia and East Europe, in that order, the investment is likely to slow down instead of increasing on the scale we need, especially in the presence of political stability. PM Gro Harlem Brundtland of Norway said, though it was quoted in a different context from George Bernard Shaw “it is not a great sin to hate anybody, it is a far greater sin to be indifferent”. Regretfully, on a sliding scale basis, the investment world is focussing on East Asia and East Europe to the benign exclusion of everyone else, in fact the best we can do is to hope for investment from East Asia, which both successive elected governments have been reasonably successful in achieving, particularly the Ms Bhutto regime.
In essence “the Forgotten Middle Kingdom” between East Asia and Europe consisting of 1.5 billion people are on their own. The west insists on platonic versions of democracy and accountability in us while it looks the other side in the respect of East Asia. What we desperately need is stability and order for economic progress. While the GOLKAR role model may be too far, we need to give whoever is elected a clear authority to rule. Whatever may be the circumstances of electoral history we cannot afford to sit on judgement over it while future history passes us by today. As much as we decry Asif Zardari for various misdemeanours, this is mostly in the realm of rumours while the fact remains that he gets things done as we have seen in the environmental field in the mould of Suharto, Mahathir, etc. Most of East Asia is an imperfect democracy but it has created an economic Valhalla for their people. We need some people who will force-feed this nation into economic prosperity, if the price one has to pay is a benevolent restriction on freedom, so be it. As the crossroads of “the Forgotten Middle Kingdom”, Pakistan is at Ground Zero of reality today, it is time to wake up and get in line or be prepared to be consigned to oblivion. In the paraphrased words of George Bernard Shaw, we may be “condemned to indifference by the developed world”.
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