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 Personal View 09:42 AM GMT 

Gerald Segal - Time to look west
Asem will only be taken seriously on the world stage if Asian economies start to play by western rules

The true value of multilateral gatherings is best judged in times of crisis. On Friday, London plays host to the Asia-Europe meeting (Asem), a gathering of heads of government from 10 Asian and 15 European states.

The meeting will surely fail. Behind the usual diplomatic communiqués - which will be full of praise merely for the fact of the meeting - will lie a big missed opportunity.

It is hard to imagine Asem making any effective contribution to resolving Asia's economic crises. It is unlikely that it will even seriously enhance Asia-Europe co-operation. This has little to do with the effectiveness of the diplomacy of the hosts, and far more to do with the disarray in Asia and the mistaken belief that the crisis is simply economic.

The first Asem - in Bangkok in March 1996 - was born out of Europe's fear of being shut out of Asia's economic boom. It also watched anxiously as Asian economic co-operation developed with the US. The agenda was set largely by East Asians confident in allegedly distinctive "Asian values" and their new form of capitalism. In the face of such euphoria, Euro-cringe meant that eyes were held firmly shut at the sight of the political and other problems in Asia that would eventually lead to the crash of 1997.

Asem was mainly about raising economic consciousness about Asia in Europe. Tentative attempts, mostly by northern Europeans, to raise political and security issues were rebuffed.

Asia's crash took Asem's flimsy edifice with it. The trouble is that Asem's effectively politics-free agenda leaves little room for the crucial understanding that a return to economic health in Asia demands political as well as economic reform. Transparency and trust in a financial sector, for example, requires more transparency and pluralism in the political system. Moreover, Asem's economics-in-command agenda is vulnerable to a simple fact: non-Japan Asia accounts for less than 7 per cent of world trade. Given this, Europeans might well be forgiven for wondering whether they paid too much attention to south-east Asia or even China.

As tempting as it may be for Europeans to turn their back on Asia, at least for the next few years, it would be a mistake. Asem can still prosper if it adopts a three-part agenda.

The most important change must be to put the politics of Asia-Europe relations much more at centre stage. This is a matter on which western Europeans can make a difference. They are already providing political assistance to eastern Europe to create better legal systems, more robust non-governmental organisations, stronger press freedoms and so on. A version of that package could be replicated for Pacific Asia.

Second, such political reform would require social changes. At the moment, too many Europeans have concentrated on, for example, learning lessons from Asian education systems. It would be better if the two sides pooled their knowledge about best practice in matters such as higher education, information technology and environmental policy.

Third, Asians and Europeans need to appreciate that regionalism is not an alternative to globalisation even if it operates on the big scale of Europe and Asia. There is no Asian solution, for example, to Asia's economic crisis.

A more forward-looking strategy would be an Asem that, for example, agrees to match any trade liberalisation measure agreed in Apec (the Asia-Pacific Economic Co-operation forum, of which the US is part). This would help integrate the decisions taken in both bodies into the World Trade Organisation.

Similarly, Asians and Europeans cannot protect themselves from the tidal waves of international financial flows through regional pacts. Asem's small-scale initiative, to be announced at the summit, for a "know-how" fund for domestic Asian financial reform is a step in the right direction precisely because it will be operated through the World Bank and not through a regional organisation. By helping ensure that Asem states do not seek ways to opt out of the global economy, Asem will be helping to keep the US honestly committed open multilateralism.

Such an Asem agenda requires a new honesty about where power lies. There is no "miracle" in Pacific Asia; the notion of a "Pacific Century" remains a chimera. South-east Asians who sought to lead the Asem process have, through economic failure, lost their right to lead it. Japan has yet to prove it can lead Pacific Asia towards a more effective role in the global system.

The fact is that power still lies outside the Pacific. Institutions created and run by the west, such as the International Monetary Fund and the World Bank, formulated the responses to Asia's crises. American and European banks organised the terms of rescues.

Asem will not be taken seriously unless its agenda is radically revised. Much of the economic agenda can be left to the markets to manage. An inclination to manage the market helped create the kinds of crises Pacific Asia is now experiencing.

Putting more emphasis on the political and social roots of reform is essential, even if the plain speaking about crony capitalism and human rights will be considered uncouth. It is neither schadenfreude nor neo-imperialism to argue that Pacific Asia and Asem will only flourish if Asians undertake the political and social reforms that make them better able to compete in a global economy with more open - and, yes, western - rules.

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