Saturday, November 12, 2011

Pacific sunshine

The sun shines in the Pacific, but is setting in the Atlantic. As Europe grapples with a severe economic crisis that has already brought down two governments and the United States struggles to fend off a double-dip recession, the Asia-Pacific region continues to see robust economic growth.

These global economic trends further vindicate the billing of the 21st century as belonging to the Pacific Rim countries.

Leaders of the Asia-Pacific Economic Cooperation (APEC) forum gather this weekend for their annual retreat in Honolulu, Hawaii, right in the middle of the Pacific Ocean. Luckily for the US, which is flanked by both the Atlantic and Pacific oceans, it can claim to be part of the rise in the Asia-Pacific region.

On the eve of the APEC summit, Secretary of State Hillary Clinton pronounced this as the “American Pacific” century, sending signals that the US intended to take an active part in the region’s rapid rise.

With Europe in the doldrums and the US is pulling out of Iraq and Afghanistan, Asia welcomes more US activism in this part of the world.

Asia is rapidly becoming the main driver of global economic growth, with China and India leading the pack. Indonesia and some of its Southeast Asian neighbors are also partaking in this development. While most Asian economies are still tied to traditional export markets in the US and Europe, they are also making strides in integrating and realigning within their region. They may not have completely “decoupled” from Europe and the US, but they have become less dependent on them.

The crises in Europe and the US should make Asian countries more determined to trade more among themselves. The proliferation of bilateral and regional trade pacts, which led to the phrase a “noodle bowl of free trade agreements”, indicates the need for Asian countries to better coordinate their trade and economic policies.

Also, greater economic power means greater responsibility. With the exceptions of Japan, Korea and Singapore, the rest of Asia are still “developing countries” by definition. Their economies may loom large, but because of their huge population size, their average per capita income is still far below that of Europe and the United States.

While the specter of a European meltdown haunts the Hawaii summit, APEC leaders should discuss how the new economic powers of East Asia can play greater roles and more responsibility in shaping the global economy. Editorial, Jakarta Post

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