26 May 2023 12:53 am Views - 387
President Ranil Wickremesinghe at the Nikkei Forum
President Ranil Wickremesinghe took the stage at the ‘Nikkei Forum: Future of Asia’ held in Tokyo, Japan yesterday. During his address, President Wickremesinghe also emphasised that Asian nations should refrain from taking sides in the global Big Power rivalry, as many have chosen to prioritize the progress and development of Asia.
Following are excerpts of the speech delivered by President Ranil Wickremesinghe:
Asia
Claiming nearly 30% of the Earth’s land mass, Asia is home to 4.75 billion people, which is about 60% of the world’s population. The region is now the world’s largest economy.
Despite setbacks on the global stage, Asia has the potential for continued growth. China’s recovery, together with a healthy domestic demand in India, will be the main support of growth for the region. Asia also has the advanced economies of Japan and South Korea contributing to the region’s development, through foreign investments and technology transfers.
ASEAN, as the 5th largest economy in the world, is growing at a steady pace.
West Asia continues to experience high economic growth. All in all, not only has Asia become the global economic powerhouse of our age, and the most dynamic region, but it is also on an unprecedented upward trajectory.
Thus the centrality of the global economy is shifting to Asia. The region’s economy is already similar in size to those of Europe and North America. And as the global economy seeks to recoup, Asia and the Pacific is predicted to contribute nearly 70% of global growth this year.
Asia’s strength is derived from its openness.
The territory comprises some of the world’s wealthiest economies and some of the poorest; large sub-continental powers as well as
small states.
This diversity has only served to strengthen the region’s role in the global arena. All of our countries benefited from the cooperation between the US and China in the post-Cold War era. Yet the subsequent rapid rise of China and the inability of the two countries to agree on China’s role on the international stage has led to rivalry and needless tensions in our part of the world.
It is from this political background that Asia has to grapple with incipient as well as prevailing global challenges as the post-cold War era comes to an end. I will expand on the main challenge.
Climate Change
Climate change is a planet-defining challenge, and the stakes are particularly high for Asia.
Temperatures are rising twice as fast in Asia than the global average, which is also related to the escalation in weather severity and the frequency of natural disasters. Rising sea levels from global warming are eroding land and coastlines; imposing severe pressure on rural incomes, food security, and
commodity exports.
By mid-century, rising waters will impact nearly a billion people in the Asia-Pacific region. Ironically, the region is also a key cause of the climate change crisis. We produce about half of the world’s carbon emissions and have five of the largest greenhouse gas emitting countries.
One cannot emphasise the urgency for policies and actions to curb emissions on the part of these countries.
Meanwhile, much of Asia is already responding to mitigate the challenges of climate change; with virtually all countries having made updated commitments under the Paris Agreement.
However, it would be appropriate if Asia could agree on a common timeline for achieving carbon neutrality, based on the shorter period upheld by some of the industrialised countries in our region. This is possible if an agreement is reached amongst China, India, Japan, Korea and Indonesia.
Trade Integration
The entry of the Asian juggernaut in the form of China, the ASEAN Tigers and India have effectively changed the international economic order of the 20th century. Yet these gains are at risk today, as Asia confronts debt sustainability, de-coupling, and economic coercion. Debt sustainability consequent to COVID-19 is the critical impasse of several Asian nations, Sri Lanka being one of the first and worst affected.
As a middle-income country, Sri Lanka accepted that:
a) Time is of the essence in resolving the issues of debt sustainability, and
b) The only option available for vulnerable middle-income countries is to seek the assistance of the IMF to ensure multilateral coordination and cooperation in debt restructuring.
Decisions were quickly taken to enter negotiations; talks began in June last year, a Staff-Level Agreement was reached in September, and the IMF Executive Board approved a US $3bn loan under the Extended Fund facility in March 2023 and Parliamentary approval was obtained in April this year. We have now started creditor meetings and hope for a successful conclusion before the end of 2023.
The US-China rivalry has given rise to a number of responses by the West especially to economic coercion and weaponising of economic vulnerabilities. Yet some of these responses may result in a setback to trade integration in the region. Unlike the West, Asia is dominated by middle-income and low-income economies
This process involves the multilateral agencies, Paris Club members, India, China and the private creditors. India is working with the Paris Club, while China, in addition to holding bilateral meetings, is also taking part in creditor meetings. Sri Lanka is dedicated to ensuring equal treatment for all creditors. We want this exercise to succeed because our experience will enable more middle-income countries to utilise the IMF in ensuring multilateral coordination for debt relief.
The US-China rivalry has given rise to a number of responses by the West especially to economic coercion and weaponising of economic vulnerabilities. Yet some of these responses may result in a setback to trade integration in the region. Unlike the West, Asia is dominated by middle-income and low-income economies.
Of the 12 high-income economies in Asia, only 6 are outside West Asia.
The rest of us, including China, India, and Indonesia, are middle-income economies. We have to overcome the middle-income trap of economic stagnation.
In addition to economic coercion, other impediments to trade integrations are economic de-coupling and similar measures contrary to the WTO rules.
Needless to say that we in Sri Lanka and many other Asian nations are opposed to economic coercion: whether it be by one country coercing another using its economic power; or by indirect methods such as de-coupling, or friend-shoring–manufacturing and sourcing only from geopolitical allies - contrary to the WTO.
Thus the WTO system put in place three decades ago should not be bypassed for short-term geostrategic gains. The rules of the game cannot be changed arbitrarily. The losers will be the middle-income Asian countries.
Sri Lanka welcomes the pledge made at the G7 Hiroshima Leader’s communiqué to reject de-coupling and its strategies in favour of economic resilience and economic security. To this end, the G7 has undertaken to engage in dialogue and follow a cooperative approach within the group as well as with global partners - including developing countries.
It is appropriate that the rules-based multilateral trading system, with the WTO at its
core being upheld.
U.S. / China Rivalry
Asia has become the crux of the U.S.-China rivalry.
The intensification of that rivalry in recent times has brought about the QUAD (between USA, India, Australia, and Japan) and the Indo-Pacific on one hand and the Belt and Road Initiative (BRI) on the other.
One thing is certain, Asian countries do not wish to be forced to manage competing pressure from these two sides.
For example, most ASEAN countries and China are economically interdependent; and countries such as Cambodia and Laos have moved into the Sino-economic radar.
By the time the U.S. launched the Comprehensive Strategic Partnership with ASEAN late last year, China had already established a similar link with the Association a year before.
Consequently, the pressure on Asian countries to choose between the U.S. and China is being resisted by many.
We are opposed to what my friend Vivian Balakrishnan, the Foreign Minister of Singapore, calls for the bifurcation of Asia.
We in Asia don’t want to choose between U.S. and China. Many of us cannot make that choice because we have already made our choice, and that choice is Asia. We want an Asia that can accommodate the Indo-Pacific, the BRI, as well as the ASEAN Outlook on the Indo-Pacific.
The BRI is a strategy to increase China’s influence in Asia and Africa through economic means. We, the members of the BRI, have no security arrangements with China, nor do we intend to enter into any security agreements with China.
The Indo-Pacific is an evolving concept with unanswered questions.
The APEC (Asia Pacific Economic Cooperation) is a structured regional organisation, which includes channels of dialogue between the U.S. and China. However, on the other hand, the Indian Ocean is amorphous. There is no effective regional political system, nor structures to deal with economic or security matters.
The only principles guiding the Indian Ocean States are the outcomes of the Asian African Conference of Bandung 1955 and the UN Declaration of the Indian Ocean as a Zone of Peace. These were again restated at the inaugural Indian Ocean Rim Association (IORA) Leaders’ Summit in 2017. Therefore in the absence of any structures in the Indian Ocean, Sri Lanka convened “Indian Ocean - Defining Our Future Conference in 2018” which highlighted the need for an agreement on the freedom of navigation, overflight, and undersea cables.
Then in 2019, the ASEAN adopted the ASEAN Outlook on the Indo-Pacific - the Asia-Pacific and Indian Ocean are distinct but closely integrated and
interconnected spaces.
Sri Lanka is committed to multi-layered connectivity in the Indo-Pacific. Furthermore, we also support Prime Minister Kishida’s Principles for Peace and Rules for Prosperity. In keeping with the Rules for Prosperity, Sri Lanka will apply for membership to RCEP to achieve a higher level of economic liberalisation.