WORLD ECONOMIC GROWTH ENGINE DR M. MANZOOR ALAM
World’s Economic Growth Engine
The designing, packaging and marketing of Asia uses the standard recipe of advertising –– a little bit of truth, a lot of hype, dollops of dreams: stir and put on a slow boil.
The recently concluded ASEAN summit in Indonesia was a grand spectacle. The 36 year-old organisation of ten South East Asian nations has of late been trying to woo Japan, China and India in a bid to emerge as some kind of a European Union of the area. The ambition is quite understandable. The only problem is that inordinate media hype makes it look as if the ambition has already been fulfilled. The fact remains that it cannot be achieved by 2020, not even in terms of similarity, let alone parity.
The hype was even more clearly evident in the Indian poet prime minister Atal Behari Vajpayee’s address at the India-ASEAN summit in the Indonesian island of Bali. Given to the poetic propensity for exaggeration, Vajpayee declared grandly, “The 21st century would be Asian century”. Sounds familiar? Yes, every time African heads of state hold a summit of OAU, they declare as grandly that the 21st century belongs to Africa. And forget about starvation, civil war, genocides and tribal jealousies.
ASEAN is also deeply worried about the growth of China at a breakneck speed and wants to consolidate into a close-knit economic grouping to emerge as a balancing factor –– something like European Common Market, if not like European Union. Observers visiting the ASEAN region wonder how it looks like the Western Europe of late 19th century –– the same hectic economic activity, the same enthusiasm for growth, the same all-pervasive impulse that drives emerging economies to gallop at a fast speed while fully developed economies slog on at a slower pace. But the similarity ends there.
The situation in the two regions is almost entirely different. First, the EU is vastly richer, with well-developed supranational institutions like European Commission, open borders, single currency, single market for goods and services and a common labour market. That means far more diluted sovereignty of component states, common human rights standards and close integration.
That only very few of these are attainable in the case of ASEAN is evident from its vision 2020 which purports to develop the region into a free-trade area by then. For this they have marked 11 sectors for establishing common standards, removing tariffs and improving customs clearance pace. This will take some real doing because ASEAN’s membership is too unevenly developed –– here we have Singapore (per capita GDP: $ 24,000) and Myanmar (per capita GDP: $122) trying to goosestep together uncomfortably.
The venue for India-ASEAN summit was marked by a poignant symbolism. Being the target of last years fearsome bombing in which more than 200 revelers (mostly Australians) died, it suited India’s anti-terrorism agenda. The joint declaration reflected India’s concerns, which in the coming elections is sure to be tomtomed by the BJP as its own “achievement”.
The world is ultimately being divided into preferential trading blocs where members provide each other with free access to their markets with minimum or no tariff and quick customs clearance, besides amiable terms for investment. This somehow warps the larger trading scene because of multiplicity of systems. However, everybody seems to be going whole hog about it without bothering too much about the growing complications in the larger picture.
Among the 11 areas identified by the ASEAN to be worked on in Vision 2020 is “open skies” programme as well. This envisages unrestricted air travel and operation of flights by members in each other’s country. During the India-ASEAN summit India offered daily flight facilities to the ASEAN countries airlines to and through the major Indian cities.
Thailand proposed a single visa for tourists throughout ASEAN and an open-skies policy. On October 8 ASEAN reached an agreement with Japan as well as India for trade liberalisation. ASEAN, with a population of 500 million, has a GDP of $ 737 billion. If add China, India and Japan, it would account for nearly half the world’s population and a GDP of nearly $ 6 trillion, that is nearly three-fourth of that of the US. That sounds a little too rosy, but by 2020 Asia is sure to surge ahead, although its per capita GDP as a whole world would not be more than $ 3,000-4,000. That is a far cry from present per capita GDP in developed European countries like Luxembourg (45,348) or Liechtenstein ($ 42,410).g
DR. MANZOOR ALAM