No Need To Fear Asia
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Perhaps. When you look at the mess George W. Bush’s administration made of Iraq, the fallout from the US subprime crisis and the rise of developing nations around the globe, it’s easy to wonder if the US empire is going the way of the Roman one.
There’s plenty of hyperbole here, too. Asia’s optimists tend to discount the very real risks of financial hiccups throughout the region and high poverty rates. Arguments that China will dwarf the US economy in a few decades simply aren’t credible. Yet, neither is the sense in Washington that Asia’s rise is a big threat. Here, there is much to glean from Mahbubani’s take on the future.
Mahbubani is at his best when he highlights two dynamics many miss. The first is that Asia’s rise is inevitable. The second is that the world economy won’t become a zero-sum game just because more Asians get closer to prosperity.
“For centuries, the Chinese and Indians could only aspire to it,” wrote Mahbubani, who is now dean of the Lee Kuan Yew School of Public Policy in Singapore. “Now more and more believe that it is within their reach. Their ideal is to achieve what America and Europe achieved. They want to replicate, not dominate the West.”
It’s about global wealth growing, not being spirited away to Beijing or New Delhi. Asia’s rise is, in a way, the spreading of what Mahbubani calls the “Western dream” and should be seen as a plus. “Yet, many western leaders begin their speeches by remarking how ‘dangerous’ the world is becoming,” he says. To Mahbubani, all this is code for the West not wanting to cede its status to upstarts such as China and India. Look no further than the G-7 nations meeting in Tokyo last weekend. How can the G-7 be relevant when those doing the most to influence the global economy don’t have a seat there? The reluctance to welcome new members smacks of the elites protecting their turf.
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Again, lots could go wrong with Asia too. Yes, China’s population has never been more driven to become rich. Yet, China faces a Herculean task of creating millions of jobs while censoring the internet and, essentially, hindering the forces of innovation. Pollution is another massive obstacle for Asia.
The idea of a benign Asia also is a hard sell to those looking at how governments are spending untold billions of dollars on military hardware and technology.
Political instability is another huge challenge for Asia. This week’s assassination attempt of East Timor President Jose Ramos-Horta by renegade soldiers is a case in point. Recurrent conflicts between Pakistan and India over Kashmir, civil war in Sri Lanka, North Korea’s nuclear-weapons programme, China’s Taiwan policy and intermittent coup rumors in the Philippines also come to mind.
Even so, Asia isn’t going away. Imagine if Goldman Sachs Group is even slightly correct that by 2050 three of the four biggest economies will be Asian. It’s hardly a given that that outcome would be bad for the West.
It was casino baron Sheldon Adelson who explained this best to me a few years back. “The thing about Asia is that as Asians get richer, they will buy more of the West’s goods,” he told me. “This is about the pie getting bigger and everyone getting richer — not about Asians stealing growth from us.”
That’s a tough sell for US voters fretting about the rise of the so-called Wal-Mart Economy. Until recently, US politicians preached the gospel of open markets and fought for less trade barriers. Now that developing nations are competing with the US, Clinton, McCain and Obama will be under pressure to reconsider this whole globalisation thing.
It’s a safe bet that Asia will play an increasing role in the US election. China’s currency policy and tainted goods, India’s outsourcing industry and Asia’s cheap labour will come up often as politicians grapple with solutions to worker insecurity. Here, a more optimistic message may be just the thing.
“Too many western minds are looking at dangers,” Mahbubani wrote. “Few are looking at the opportunities.”
William Pesek is a columnist for Bloomberg
(C) 2008 Bloomberg
(Businessworld Issue 19 - 25 February 2008)