Opening remarks at the conference "Asia og vi. Maktskifte fra vest til øst""

The Minister based his remarks on the following points
(check against delivery – webTV).

 Distinguished speakers, friends, 

• Thank you, Eva (Bratholm). Wish you all welcome. This conference is a part of the Ministry’s “Refleks Project”. Purpose: “to test” our “foreign policy reflexes” in a world that is rapidly changing.
• When the global focus moves to the East, we need reflection, dialogue and critical debate in order to study the consequences for Norwegian foreign policy. (Not only that the focus moves to the East, also to the North, the Arctic).
• We meet – in the midst of Europe/euro crisis and US economy crisis. The Economist in 2010/2011: Never been so many optimists than now, but they live in the East, and not in the West.
• We hope this conference will foster more (facts and) knowledge, interest and public debate on the spectacular growth in Asia, but also on challenges there. Themes: Economy/technology, politics/society, culture. World order, regional order. “The Asian factor”.
• Three main points I would like to focus on:

1.

• First: The shift of economical power from the West to Asia: is already a fact. Have we in the West fully recognised this dramatic shift of power?
• The significance and the many consequences are highly complex (we live in an interdependent world) – and: I believe this is a positive development.
• This is a historically new situation. However: Asia’s role as the world’s economic engine is not new. The shift represents a “recapture” of a long held Asian position.
• (The British economic historian Angus Maddisson has calculated that as far back as 2000 years ago, China and India together accounted for 59% of the world economy – a position they generally retained until the 18th century).
• Today, China is the world’s second largest economy, Japan is the third and South Korea holds 14th place.
• Emerging, or re-emerging economies in Asia – such as China, India, Indonesia and South Korea – have benefited greatly from globalisation in the past few decades. Hundreds of millions of people have been lifted out of poverty.
• China, India, Japan, South Korea and Indonesia are all major economies in the G20, and their influence are expected to continue to grow. Taken the lead in the world’s economic development.
• However – remember: the US economy is still almost three times larger than China’s, and the US and EU economies combined are today twice the size of the economies of China, India, Japan and the ASEAN countries put together.
• But, the point is that the gap between the Western and the Asian economies is narrowing, and with accelerating speed as the financial crisis continues to hit the US and European economies.
• The complexity of a highly interdependent world makes it impossible to think in traditional terms, for example that the rise of some nations inevitably means the fall of others. Today, there are few strategic certainties. The international system appears (created just after the end of WWII) to be in a period of prolonged transition? A world of “complex disorder”?
• The crisis in the financial markets playing out: Is there enough effective international cooperation or “global leadership” to deal with it? Fear of a resurgence of nationalism and protectionism? Nations looking inwards instead of cooperating?
• The financial crisis in developed economies is – of course – not good news for the booming Asian economies. There is already a slowdown in Asian export-oriented economies as a result of decreasing European demand for import commodities. (Remember: The EU is the world’s biggest purchaser of Chinese goods, with a market value of about USD 380 billion last year).
• The debt crisis in the US and the euro zone could also affect growth in China.
• The relatively weak global outlook underscores the importance of transforming China’s economic growth model so that it relies more on domestic consumption. Stronger domestic demand in China would also help support the global economy.
• The same goes for India, where around 50% of GDP is generated by services. These new IT-based industries find their customers – their markets – in the US, Europe and, increasingly, in China.

2.

• My second main point: The relative economic power shift to the East will inevitably be followed by a shift in political power.
• The Asian countries are not only the world’s economic engine, but also increasingly important international political players. US Secretary of State Hillary Clinton: the Asia-Pacific has become a key driver of global politics.
• And I agree. Most global issues – such as demography, poverty, climate change and the current financial crisis – cannot be resolved without Asia. (WTO Doha Round, Hong Kong 2005/2006. The players today. My talks with WTO/Lamy last week).
• This is not new, but Asia is increasingly taking a leading role in addressing common challenges, which also means that its voice will get stronger in multilateral forums. As our keynote speaker today, Professor Martin Jacques, author of the book When China Rules the World, suggests, China might want to challenge established perceptions of global systems and relations.
• An example: Climate change: The world needs the combination of the technological capabilities of the West and the East. China is re-establishing itself as a technological super power. Takes a leading role in the development of the low carbon economy.  Means competition for Western companies, but China’s ambitions are good news for the world. By way of example, China is most likely the country that will offer the world renewable energy technology at competitive prices.
• Asian countries are demanding a greater international political voice. They already have an increased representation in global organisations. This trend will continue.
• Important point: Western countries are no longer in the majority where important decisions are being made. The financial crisis represented a shift of relevance from G7 to G20, clarifying the status of the world economic powers today.
• The world’s emerging economies are demanding a greater say in the IMF, and they will get it. Managing Director might not be a European in the future.
• The BRIC countries are now discussing how they can contribute more to the IMF to increase the role of the emerging economic nations in combating the eurozone sovereign debt crisis. Indebted Western countries are being told by emerging powers to “get their house in order”!
• Indonesia, today a democracy with the world’s largest Muslim population, is increasingly becoming an important economic, regional and global stakeholder. Our need of knowledge, better understanding of such things.
• The World Bank predicts that Indonesia will be one of the sixth largest economies by 2025. This year, Indonesia heads ASEAN – an organisation that has an ambition to increasingly become an important regional player in Asia. Indonesia plays an important role both in the UN and within the G20.
• There is increasing competition for the world’s resources, which are getting scarcer as the population continues to grow (about to pass the 7 billion mark this month). Asia is playing an increasingly active role in global policy-making on natural resources.
• In its recent report, Asia 2050, the Asian Development Bank claims that “with over half of the world’s population residing in the region, Asians have more at stake in the well-being of the planet than any other people” (...) (A growing) Asia’s dramatically larger footprint will bring new obligations and new opportunities.”
• And we already see: China is now the largest producer of renewable energy, while India is seeking to supplement its Gross DP with a Green DP. In 2008, South Korean President Lee proclaimed his vision of a Green Deal. Large parts of national economic stimulus plans have been targeted at developing a green economy both in South Korea and in Japan. Indonesia is deeply engaged in sustainably managing its vast rainforests. Numerous experiments and much innovation.
• This change in mindset could fundamentally alter Asia’s role and mode of interaction with the global community.
• Now: security issues related to access to resources: The emergence of new political powers: will it lead to greater political and military “rivalry”?
• World order (since WWII): From bipolar – unipolar – multipolar – “zeropolar”? The decline of US relative power. Lack of an effective global governing system to handle crisis situations. Increased competition in Asia for natural resources to feed the economic boom. Unresolved territorial conflicts. Asia lacks effective regional institutions to handle conflicts.
• The region. The regional order in Asia. How will that be? Economic ties between countries in Asia are increasing. We see growing intra-regional trade and numerous networks of trade agreements.
• But: Different situation when it comes to policy and security policy issues. Mutual lack of trust, combined with a lack of regional security policy architecture that includes major powers. 
• Several countries in Asia see the US as an important player in order to maintain stability in the region, and several countries eager to discuss closer security cooperation with the US.
• ASEAN emerging as an important regional institution: focus on dialogue, non-intervention, also increasingly an arena for discussions on security policy issues.
• East Asia Summit important arena for policy discussions. For example, the agreement this summer with China on a Code of Conduct in the South China Sea. But still, lack of mechanisms to handle conflicts of interest between nations if tensions escalate.
• Climate change. Population growth/challenges.
• The strategic cooperation and rivalry between the US and China are of particular interest and concern. Clinton stated on 1 October: “The United States is committed to the success of China, because a thriving China is good for America and a thriving America is good for China.” Clinton’s remarks on 11 October on “America’s Pacific Century”: “China represents one of the most challenging and consequential bilateral relationships the United States has ever had to manage.”
• The US and China will have a particular responsibility to build confidence and transparency as a fundament for stability in the Asia-Pacific. Politics, economy, values.
• Presidential elections in the US, next Party Congress of the Chinese Communist Party in 2012. Opportunities for hardliners on both sides to promote rivalry instead of cooperation. At the same time, the US and China have established a bilateral strategic high-level dialogue to increase cooperation on all levels.

3.

• My third main point: How will an increased international Asian political influence affect us? Culture, values, norms. Universal human rights. Political culture. (I will also deal with this issue later today).
• Will we – for example – see normative challenges posed by cultures with different political systems and traditions?
• The picture not easy to read: On the one hand, some tendencies towards a more nation state-based policy based on self interest. On the other hand, the globalisation trend increases, where values also play a big part.
• Asia is not only about economic growth but also: Issues (“problems”) related to demography, poverty, authoritarian regimes, security challenges, access to clean water and natural disasters.
• The world is “coming together”. “Local” issues and challenges are not local – such as poverty, demographic development, environmental problems, economic crisis and terrorism are global challenges. So, do we see a heightened awareness both in Western countries and in Asian countries of a common destiny? A new sense of a global identity?
• The new challenges associated with the economic rise of China, India and the rest of Asia address fundamental weaknesses in the West, for instance in terms of indebtedness. Surveys show signs of pessimism among the Western population, greater optimism in the East.
• These are all matters on which Professor Huang Jing as Director of the Center on Asia and Globalisation (at Lee Kuan Yew School of Public Policy, Singapore) has written lucidly before, and he will surely provide us with new insights today.
• How the global system works. Priorities. Should we see a greater Asian political influence as a challenge to our Western-style democracies? Asia has never been more democratic than today. Today, states like Bangladesh, Philippines, South Korea and Indonesia are all democratic states.
• Some states might want to focus on competition in order to gain political influence. But the quest for geopolitical influence is not a zero sum game.
• Economic growth never lasts forever. Asia economies are not only dependent on the purchasing power of the West, but must also make the shift from labour-intensive growth model to a knowledge- and consumer-based model. Cheap labour is becoming less available.
• The West is no longer the only innovative force, and certainly will not be in the future. It is a myth that states like China can/will only copy others and not invent something new.
• East Asian states are facing profound demographic challenges, with some signs that China may grow old before it grows rich. Demography and development are inherently linked, as has been vividly demonstrated by Professor Hans Rosling. This will also be the topic of his talk today. These challenges are not unique to East Asia.
• The economic clout of the rapidly emerging economies of Asia enables these states to project greater political assertiveness. This shift is accompanied by an ambition to exert “definitional powers” – i.e. to participate in defining norms that have been traditionally defined by the West. For example: on understanding the limits of state sovereignty, fulfilment of treaty obligations under international law, scope of freedom of speech or religious freedom, the universality of human rights and issues on international humanitarian intervention and the limits to states’ responsibility to protect.
• With greater status and influence come also greater responsibilities as new global leaders.

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Web TV from the conference: part I, and part II.