Towards a truly pan-Asian community

Bangkok Post
May 19, 2006


FOCUS / ASIAN COOPERATION DIALOGUE
Towards a truly pan-Asian community From its inaugural meeting at Cha-am in June 2002, the ACD has helped Asia interact with the rest of the world on a more equal footing

By DR MANASPAS XUTO

As a continent, Asia possesses enormous potential and the inner strength necessary to build the world's fountain of peace and prosperity. Asia is the cradle of the world's civilisations. Hinduism, Buddhism, Sikhism, Shintoism and Taoism, as did Judaism, Christianity and Islam (in Asia Minor) _ all originated on this vast continent and are, by birth, Asian religions and faiths. In antiquity, Asia was a land of great cultural richness.

In the present day, Asian culture remains cherished and widely admired worldwide. The bare statistics alone underscore Asian strength. Asia is home to approximately 3.7 billion people _ more than half the world's population, and growing every second. The region accounts for more than a quarter of the world's exports and global GDP. Our total combined international reserves amount to over one trillion US dollars, over half of the world's foreign exchange reserves. These, too, have been growing fast. Asia is also a hub of rich natural, human and capital resources.

Economically, significant transformations have taken place. The countries of Southeast Asia have strengthened themselves through cooperative endeavours and become a new bastion of growth, narrowing the income gap among their populations. China and India are now the new growth barometers for the world economy. Japan, which used to be an economic powerhouse, is now moving out of its decade-long deflation so that it can, again, play the role of a growth engine for the rest of Asia, while South Korea's technological advances are, by any measure, phenomenal.

The largest oil and gas reserves in the world are now within Asia _ at a time when oil prices have risen to unprecedented heights.

The call for Asians to come together in a continent-wide cooperative forum has never been more timely. And in this quest to make Asia for Asians with a global, outward-looking approach, Thailand has played a significant role.

During the past 45 years, Thailand has been either the protagonist, founder, initiator of, or active participant in, sub-regional and regional cooperation dating back to 1961, when the Association of Southeast Asia, or ASA, was established. This was followed in 1967 by the founding of the Association of Southeast Asian Nations, or Asean.

Of more recent origin are the Asia-Pacific Economic Cooperation (Apec), Mekong-Ganga Cooperation, the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), Greater Mekong Sub-region (GMS), BIMSTEC and, of immediate importance, the ASIA Cooperation Dialogue, or ACD.

The ACD is a prime example of a continent-wide cooperative framework that is guided by positive thinking and the comfort level of participants. To prevent political problems from obstructing progress in regional cooperation, the ACD has excluded bilateral questions and other potentially negative issues. The deepening of positive thinking and action can indeed strengthen overall progress. As the ACD is now entering its fifth year, with the 5th Annual Ministerial Meeting to take place in Doha, Qatar, in a few days' time, it has matured into a promising and unique framework. There is substantive progress both in the dialogue and project dimensions.

Regular dialogue takes place at both the ministerial and high-ranking officials' levels in the ACD. Indeed, since its launch in Cha-am, Thailand in 2002, ACD membership has grown rapidly, from 18 to 28 countries. The latest additions are Russia and Saudi Arabia.
The ACD, therefore, encompasses virtually the whole of Asia, from the areas of East Asia all the way to West Asia. In terms of projects, the ACD carries out work in 19 diverse areas, such as poverty alleviation, finance, agriculture, tourism, science and technology, and energy.

The ACD, therefore, is well-placed to serve as the missing link in Asia-wide cooperation. Moreover, because the ACD focuses on the positive, its member countries can come together to provide their input and to see what they can do for the benefit of their own peoples and regions as a whole.

Take, for example, the issue of energy. Energy is one of the most active areas, especially as the need for ACD members to cooperate in the area of energy is all the more pressing, given today's rising oil prices and the impact of this on the economic growth and development of many ACD member countries, including Bangladesh, China, India and Thailand.

As the ACD comprises major oil producers and consumers, it has great potential to cooperate in this area for the common benefit of all members. ACD energy cooperation could well become one of the forum's showcase projects.

Various activities have been organised in this area, the latest of which was the 1st ACD Energy Forum held in Bali between Sept 26-28, 2005. As a result of this meeting, the ACD Energy Forum was set up to be the sole consultative mechanism for ACD oil-producing and consuming member countries to advance energy cooperation and to identify ways and means of mitigating the adverse effects of oil price fluctuations.

Some of the issues expected to be discussed in this forum include examining the possibility of re-investing revenues that accrue from the energy trade in ACD countries in order to ensure sustainable economic growth and development. This and other issues are expected to be addressed later this year, at the 2nd ACD Energy Forum, to be hosted by Pakistan.

Another area ACD member countries have the potential to cooperate in concrete form is finance. The 1997 economic crisis clearly demonstrated that Asia needs a regional financial architecture to ensure stability in the face of global imbalances, volatility and uncertainty.

Despite the fact that Asia's foreign currency reserves make up over 75% of the developing world's total reserves, Asian economies are lacking long-term sources of finance due to underdeveloped capital and bond markets.

There is, therefore, an urgent need to develop an Asian bond market as an investment alternative for Asian countries. The bond market will bring about efficient and liquid local currency-denominated bond markets both domestically and within the region. It will provide long-term funds for both the public and private sectors. It will also serve as an intermediary whereby funds in the region could be made available to borrowers for productive use while helping to minimise the currency and maturity risks of both issuers and investors.

The Asian bond market initiative has been implemented in various regional fora, including the Executives' Meeting of East Asia Pacific Central Banks (EMEAP), the Apec Finance Ministers' Meeting (Apec-FMM), ASEAN +3, and the ASIA Cooperation Dialogue (ACD).

Thailand, as a prime mover on financial cooperation, plays a leading role in the development of the Asian bond market under the ACD framework. Two months ago, Thailand hosted a high-level seminar on ''Enhancing Financial Cooperation Through Asian Bond Market Development'', bringing together government officials, academics and private practitioners. The seminar has laid substantial groundwork for the 1st ACD Finance Ministers' Meeting that Thailand plans to host.

As the ACD is the only cooperative framework that encompasses all the sub-regions of Asia, the ACD will help generate political support, complement the work done in other fora and add value by expanding wider coverage to all sub-regions of Asia.

To maintain the momentum and push forward this significant initiative, Thailand is making arrangements to convene the ACD Finance Ministers' Meeting this year, to discuss future plans for the Asian bond market in the ACD forum.

From its inaugural meeting at Cha-am, Thailand, in June 2002, the ACD has taken the right path to ultimately transform the Asian continent into an Asian Community, capable of interacting with the rest of the world on a more equal footing and contributing more positively towards mutual peace and prosperity.

Indeed, a good beginning has been made. Now that Thai leaders have provided the vision and the inspiration, it remains for the enlightened men and women of Asia to carry on the promising task of navigating the long road towards a truly pan-Asian community.