Books, Articles and Essays
by FR. FELIX RAJ, SJ, DIRECTOR | «
Asia is one
By Fr. John Felix Raj.
The Asia’s first Nobel Laureate, Gurudeb Rabindranath Tagore had once
proclaimed, “Asia is one”. Yes, a much-desired Asian unity seems to be in the
making. Asian nations are currently taking giant steps towards economic
integration and closer political cooperation. With 3.5 billion people – well
over half the population of humankind, Asia has a lot to offer to the global
system, in spite of linguistic, ideological, religions and racial differences.
Asian countries have the human, natural and financial potential to emerge as
global leaders in trade, commerce, investment and governance.
The main problem in the global economy is that 20 per cent of the people living
in the US, the European countries and Japan consume 80 per cent of the world's
resources. The 20/80 asymmetry requires that we build an alliance of the 80 per
cent people of the world who are now consuming only 20 per cent of the world's
resources despite most of these resources being in their countries. It becomes
imperative for giants like China and India to forge ahead in their ties to
combat adverse impact of western alliances and to enhance a model of economic
integration and political cooperation within Asian region.
Single Asian Currency
If the sense of Asian unity has to be promoted, then a single Asian currency can
either facilitate that unity or become a common means towards that end. "The
case for a single Asian currency is overwhelming," declared Hong Kong's chief
executive, Donald Tsang, at a conference in China in April 2005. But
unfortunately, reality is not that simple. Asia is not like Europe that needed a
single currency as part of a political union, and Europe had worked towards
political and economic integration for over 50 years before the birth of a
single European currency in 2001.
Asian finance ministers took another step toward creating an Asian monetary fund
at the annual meeting of the Asian Development Bank in Istanbul in the first
week of May 2005. It is a kind of European-style financial union that proponents
of closer cooperation in Asia are striving for. However, the gulf that Asia
needs to bridge before establishing anything like a European-style financial
union is dauntingly wide.
Common wisdom has it that Asia is dreaming. If it wants, economies, as diverse
and as far-flung as China, Japan, South Korea, the countries of the Association
of South East Asian Nations and India, can emulate Europe. For one thing, Europe
has settled the question of hegemony; Asia has not. "There is no hegemony in
Europe," argued Norbert Walter, chief economist for Deutsche Bank. "There are
three in Asia: China, Japan and India."
Yet the move toward common financial arrangements is a confidence-building
mechanism among Asia's rising powers. Haruhiko Kuroda's election in February
2005 to head the ADB has lent momentum to economic integration in Asia. Laying
down a key marker for his tenure, Kuroda, formerly an influential official in
Tokyo, has set up a new department of regional integration, which is headed by
Masahiro Kawai, an economist from the University of Tokyo.
Kawai points out that trade and investment among the ASEAN states, China and
Japan is leading the way, and in trade terms, the region is actually coming
together at a more rapid rate than Europe ever experienced. At the Istanbul
meeting, finance ministers from 13 Asian nations agreed to enhance a modest
mechanism that allows countries to swap their foreign reserves to ease liquidity
problems on a bilateral basis first set up in the Thai city of Chiang Mai in
The idea is to transform this bilateral arrangement into a single multilateral
process by increasing the size of the swaps and developing a surveillance
mechanism similar to that, which is currently applied by the International
Monetary Fund. Kawai has argued that this regional approach fills a gap left
open by the IMF, which is country-focused. According to Kawai, the Asian
Financial Crisis in 1997 told us that this country-focused approach would not
work because of contagion. The regional approach is important, and the IMF has
not been strong on that.
The first attempt by Japan in 1997 to set up a multilateral fund in Asia met
with fierce resistance from the United States and was hurriedly shelved. But in
Istanbul, Japan's finance minister, Sadakazu Tanigaki, gave a ringing
endorsement of moves toward an Asian Monetary Fund, saying “Japan was committed
to promoting cooperation for the further prosperity of the region."
Of course, this isn't all about safeguarding financial stability in Asia. Japan
is in a hurry to cement its role as a pivot of these financial mechanisms before
China becomes too dominant - and perhaps before the yen is overshadowed by the
yuan. China is quietly supportive because Beijing sees itself as inheriting an
Asian financial system sealed off from too much outside scrutiny. There are
shades too of the kind of Asian hubris evident before the Asian financial
But many financial experts working on integration are wary of moving too fast.
"Asia is not like Europe, "argues Jin Liqun, a former vice finance minister of
China who is now an ADB vice president. "We don't have the social and political
homogeneity". If indeed these moves toward integration are more about hegemony
than homogeny, then it would be prudent for less powerful Asian nations to
ensure that they are not being lured into a greater China or greater Japan.
Over the past decade in Asia, a growing awareness of the interdependence among
countries in the region and of the importance of regional cooperation in
managing the challenges of globalization has led to important steps to enhance
regional economic cooperation initiatives. Relatively slow progress with
multilateral initiatives and the proliferation of regional blocs in other parts
of the world have provided additional impetus to greater cooperation within
Asia. There is a realization that open regionalism can contribute substantially
to enhanced productivity and economic growth, and to poverty reduction, within
“India is ready to play an ‘active’ role in promoting Asian economic integration
and is keen to co-operate with China in achieving the goal. India’s approach
towards Asian integration and its relations with the rest of the continent is
increasingly an important element of Indian foreign policy”, announced P.
Chidamparam last year during his visit to China. He pointed out that “It was
India which first propagated the idea and concept of an ‘Asian economic
community’ in September 2003.”
Asian economies, especially India and China, seem posed to provide the thrust
necessary for continued economic growth in the 21st century. “India and China
are two of the most important contributors to the political and economic
dynamics of this continent, as also of the world. They should join hands towards
these goals” to prove the prophesy of Adam Smith, “In the 21st century India and
China would emerge as economic giants”, true.
The first Prime Minister of India, Jawaharlal Nehru, while speaking to Mr. Paul
Feng of the Central News Agency, had said on January 20, 1946, "If China and
India hold together, the future of Asia is assured." This holding together need
not be confined to diplomacy and trade; it can, by all means, be a psychological
force that can work wonders in the realms of creativity in Asia and in the
I am reminded of Tagore’s message to some Chinese friends: "Age after age in
Asia, great dreamers have made the world sweet with the showers of their love.
Asia is again waiting for such dreamers to come and carry on the work, not of
fighting, not of profit making, but of establishing bonds of relationship. The
time is at hand when we shall once again be proud to belong to a continent that
produces the Light that radiates through the storm clouds of troubles and
illuminates the path of Life."
The author is Vice Principal, St. Xavier’s College and Director, Goethals
Library & Research Society, Kolkata.