Asia calling

After the 2008 global financial and economic crisis, Asia bounced back much more quickly than any other region - partly because it had learned from the financial crisis of 1997 and 1998.

At a gathering in the German capital, Surin Pitsuwan, the secretary general of the Association of South-East Asian Countries (ASEAN), said one reason why Asia was doing so well was because of the measures prescribed by the International Monetary Fund (IMF) that were deemed so harsh at the time. However, he added that it was difficult not to draw comparisons with the way the EU and the US were now being treated by global financial institutions. He said the West was being "more lenient" on itself than it had been on Asia in 1997.

Another reason for the steady economic growth of the ASEAN region, he said, was the fact that it was part of the supply chain to India and China, Asia's two most powerful emerging economies. "When China grows, we grow with it. When India grows, we grow with it," he told journalists in Berlin.

However, he did not want to be complacent and said there was no doubt that the problems that the EU and the US were experiencing had an impact on Asia. With its strong focus on exports, the Asian continent needs the markets in the West.

To reduce the risk of being dragged down by the slump in the EU and US, ASEAN wants to expand regional demand and domestic consumption. To do this it needs to attract more regional investors but this is not a simple task, said Siran Pitsuwan. Trade between the 10 ASEAN states currently accounts for around a quarter of the whole trade volume, compared to 78 percent between the 27 members of the EU.

Hampered by diversity

Moreover, Siran Pitsuwan pointed out that one of ASEAN's strengths - its diversity - was also a hamper to economic integration, considering the gap between the states. The fact that the political systems vary so drastically - from absolute monarchy in Brunei to parliamentary democracy in Indonesia and Thailand also complicates matters. He said ASEAN's challenge was to accommodate all this diversity while shaping a new form of regional cooperation.

He also said that a common single currency was not feasible at the moment and that ASEAN members were keeping a close eye on how the eurozone tackles its current problems.

While the EU serves as an inspiration for ASEAN, it is not a model, he insisted. This was especially true regarding the principle of non-interference, which he said he knew had received criticism. "It's a work in progress and even Myanmar is feeling the pressure from other ASEAN countries and the international community. I think ASEAN has been a factor in the evolution of Myanmar."

Heading in the right direction

He said that although ASEAN was heading in the right direction and the ASEAN charter had been ratified and a human rights commission established, it would take some time before it evolved into a stable, effective and strong democratic space.

However, he did not think that political systems and human rights issues were major deterrents to foreign investment. Some entrepreneurs wanted certainty, order and stability more than anything else.

"The Chinese have very strong, sustained and continuous leadership and they are able to sustain policies while we have difficulties in ASEAN," he pointed out.

He was generally optimistic about the future and reiterated that ASEAN offered a "friendly business environment, low taxes and skilled labor forces," which would help facilitate a free flow of investment in the region. The fact that EU investment into the region doubled last year was a sign that ASEAN is on the right track, he said.

Moreover, he suggested that the EU should keep its eye on the region, considering that ASEAN's 600 million inhabitants have increasingly high purchasing power.

Author: Ziphora Robina
Editor: Anne Thomas