Join Ian Bremmer for a live discussion and analysis as this session unfolds including tweets, graphics, video and commentary.
How can ASEAN use its rising economic and geopolitical stature to ensure regional stability and consistent economic growth?
Dimensions to be addressed:
- Increasing engagement with the United States
- Enhancing China’s role as economic partner and strategic competitor
- Competing for natural resources and resolving territorial disputes
and that’s all from me. be sure to tune in for the opening ceremony in an hour’s time.
a big thanks!
and one last point, as promised earlier… a bit more on the geopolitical importance of new trade architecture like the tpp. it all stems back to the us pivot. at its most fundamental level, the key regional trend is the rise of china. this draws neighbors into china’s orbit economically, but makes them more wary of the security implications that go with it. as a result, many are willing to embrace a heightened us presence in the region.
but us policy of late has sowed doubt as to the american commitment level. on top of domestic economic constraints and other geopolitical distractions like syria, the shake-up of the american leadership in obama’s second term is cause for concern. hillary clinton coined the asia pivot– you can read her words here: http://www.foreignpolicy.com/articles/2011/10/11/americas_pacific_century. while john kerry is a very capable diplomatic replacement, his focus has always been middle east/ europe — we’ve already seen that based on the trips he’s prioritized to date.. another big asia voice, tom donilon, has resigned as the national security advisor.
how does the tpp fit in to this narrative? it’s an important factor in the competition between the us and china for economic leverage over the emerging asia-pacific region. why? it’s not just a normal trade deal. it bestrides the line between trade, investment, and geopolitics, and it will ultimately allow for intricate tradeoffs between the us and its pacific rim allies that will link us power politics, commercial gains, and the efforts of asian states to hedge their relations with china.
but just as the us pivot has lost some steam in other aspects, the growing opportunities surrounding a transatlantic trade deal take some of the wind out of tpp’s sails.
you can see myanmar situated at the bottom of the chart. for more on myanmar, tune in in an hour or so for the opening ceremony session– president of myanmar thein sein is speaking, so i’ll have plenty more to say about the country. other speakers include the prime ministers of thailand, laos, and vietnam. it should be fun. here’s the link: https://agenda.weforum.org/2013/06/opening-ceremony/
a few closing thoughts about the makeup of asean. with 615m people included– of which singapore accounts for less than 1%– it’s a wonder that singapore accounts for 12% of asean’s gdp. we are talking about a country that is only 274 square miles– less than half the size of london. it’s population density is 7,751 people per square kilometer. and that’s not the only metric that’s sky high– it’s per capita income dwarfs that of other countries in the region. here is a useful chart of some of the gdp per capita stragglers:
and that will wrap up our session. i’ve a few closing thoughts that i’d like to get to…
here’s a sense of how india is impacting asean:
-trade between india and asean is booming. it grew by 37% in fy2011-12 to about $79 billion.
it’s relations with particular asean countries are interesting. take thailand– india and thailand have been negotiating a free trade agreement for… quite a while. there have been 27 rounds of negotiations over the last 10 years. but they’ve agreed to conclude the fta this fall. and despite no trade agreement in place, bilateral trade between them has grown at over 15% a year over the past five years.
“india has been brought up exactly twice in the last hour.”
this was an unfortunate turn that the conversation took– it’s hard to discuss the future of asean without giving india its due regard.
“here in this country [myanmar], you have a good chance not to repeat china’s mistakes.”
“the process of development in any country is never smooth.”
speaking on if myanmar will lose its identity as it opens up.
“we are more modernized…we have to embrace it properly.”
with greater investment comes greater change. since 1990, cigarette consumption in myanmar has ballooned by nearly 700%:
here’s a troubling story about the darker side of new infrastructure extending into a more isolated country.
“chinese authorities are concerned more methamphetamines are entering the country over the border with myanmar.”
“drugs from that area are now being transported through the new highways and roads being built between burma and china to facilitate the transportation of cement and steel needed for the construction of oil and gas pipelines.”
discussion on free trade agreements, tpp, etc. what do they actually do?
i can speak to the geopolitical significance, and how the trans-pacific partnership fits into the rise of china and the us’ pivot to asia.
will come back to this to wrap up…
myanmar clocks in with a hefty .01% of world exports. indonesia, with 243 million people, doesn’t do much better at .6%.
singapore may have little more than 2% of indonesia’s population, but it has more than 5x the share of world exports.
as we discuss trade talks, here is a breakdown of asean world trade.
“you don’t try to prevail over your neighbors by sheer force.”
at least… not when you don’t have sufficient forces to do so.
now we’re discussing south china sea disputes. countries “going to war over a rock in the sea.”
here’s a sense of the opportunities and the hurdles in myanmar: last year, the electrification rate was 26%. earlier today, a government official estimated it had grown to a still-paltry 29%.
the poverty rate is 26%; unemployment is 37%.
on the other hand, mckinsey predicts that myanmar could quadruple the size of its economy by 2030, creating 10 million non-agricultural jobs and lifting 18 million out of poverty.
myanmar undoubtedly has a lot of catching up to do.
it’s time for questions from the audience.
#1: “in myanmar, the exploitation of natural resources has always been predatory… ” is that changing?
the response is hedging between the importance of a “very precious” environment–the need to protect it and natural resources– with the importance of growth.
we’re talking about the ‘who lost myanmar?’ question. before sanctions opened it up, china had an overwhelming presence.
here’s a very good article explaining what’s happened since:
“chinese investment in myanmar has fallen sharply over the past year amid strained relations, even as interest from other foreign investors in the southeast asian has surged.”
“myanmar president thein sein stopped a chinese-backed $3.7 billion hydropower dam project in 2011 in response to local opposition. the project would have supplied electricity to china.”
“the drop in chinese investment caused total foreign investment in myanmar to fall to $1.42 billion in past fiscal year from $4.64 billion and $20 billion in the two previous years, according to the government.”
mahbubani is discussing his latest book, the great convergence.
here’s a quote from the book:
“with the rise of a new asian, and indeed worldwide middle class, the world is rapidly approaching an unprecedented convergence of interests and perceptions, cultures and values: in other words, a genuinely global civilization.”
he envisions asia at the epicenter.
mahbubani is confident that we can “control geopolitical competition in the region.”
i would strongly take issue with that statement. i submit as evidence:
1. south china sea
2. china/japan hostilities (after a spat last year, japan’s auto exports to china fell 44.5% in september alone)
3. inherent volatility in emerging markets
“if you want to understand why myanmar is making such a smooth transition” it’s all about “regional chemistry.”
the region has “no poisonous gases.”
in terms of seeing opportunities for manufacturing shift to low-income asean countries, that is already very apparent:
78 of the 94 approved foreign investments in myanmar last year were in the labor-intensive manufacturing sector– mostly in garment factories.
we’re discussing (1) the growth of trade integration in the region.
and (2) a quest to push from export-driven economies to more domestic consumer driven economies– specifically wrt china.
third, an increase in labor costs in china grants opportunities for relocation in asean nations– especially low income asean countries like myanmar, cambodia, laos.
japan negotiating fta’s with the eu, china, and asean.
“two weeks ago, our prime minister abe visited here…made a statement to promote investment.”
abe has certainly put japan’s money where its mouth is: abe recently canceled myanmar’s $1.8 billion of debt– and promised another $500m in aid loans
and now our moderator parag khanna is shifting the debate to japan’s role, asking for input from yasutoshi nishimura, the senior vice minister of japan’s cabinet office.
within the first minute of his remarks, we’ve heard japan’s key buzzwords:
myanmar talking up its political visitors– heads of state from around the world.
it’s worth mentioning the sheer growth in foreign visitors in general that we’ve seen to myanmar– visitor arrivals rose 29.7% between 2011 and 2012, hitting more than 1 million for the first time.
we were having some technical difficulties with the sound, but we’re back… still hearing from myanmar’s deputy minister of foreign affairs.
he is thanking the countries in the east that have understood the situation in myanmar and supported it for the last 40 years.
first topic– spotlight: myanmar.
“our policy is that we want to be friends with all countries in the world.”
this has actually played out in terms of trade– pre-sanctions lifting, china took the lion’s share. since the country has begun opening up, myanmar has actively tried to diversify.
and we’re underway…
there have been some great headlines about myanmar’s historic hosting of this wef summit:
it’s myanmar’s first significant summit, with an estimated 900 attendees from 50+ countries.
and my personal favorite, declaring, “we’re not in davos anymore.” myanmar has made an incredible inaugural impression, but davos certainly has a few years of head start.
although i would take issue on one count…. indonesia isn’t a particularly small asean country. with ~240 million people, it is home to about 40% of asean’s citizens. also boasts just under 40% of its gdp. indonesia is the world’s 15th largest economy, having become a trillion dollar economy in 2012.