Friday, February 25, 2011

Asia integrates through economic, financial factors

The idea of Asia as an identity was imagined by the Greeks thousands of years ago and today it is becoming a reality, said Chas W. Freeman Jr. in the keynote speech of the Camden Conference on Feb. 18 at the Camden Opera House.

This integration of Asia is driven by economic and financial factors rather than politics and ideology, Freeman said. At some expense to the U.S. role, Asian countries are relying more on each other for trading, business deals, education and banking, he said.

“Asia is leaving the realm of Greek myth and becoming a reality,” Freeman said. “Asians are drawing together as they rise in wealth and power. Their economies, their companies and their influence now extend beyond their own continent.”

Freeman said the world had to adapt to the United States’ domination of political economy in the 20th century. “Americans must now adapt to a political economy increasingly centered on Asia,” Freeman said.

Freeman is a diplomat, author and writer who served for 30 years in the State and Defense departments. He is chairman of Projects International. Freeman speaks fluent Chinese, French, Spanish and Arabic.

Freeman said region-wide political change — marking the final collapse of the post-colonial order — is strengthening the ties of Western Asian countries to other parts of the continent. He cited Arab protesters overthrowing the U.S.-supported Mubarak regime in Egypt; withdrawing from a shattered Iraq; and military actions in Afghanistan and Pakistan that have “generated more terrorists than they are killing.”

Of this context, Freeman said, “Some might consider it ominous.”

“The Arabs, Turks and others in West Asia were trying to reduce their dependence on the United States even before current events illustrated how much contempt they feel for our perceived hypocrisy, and how little weight the American word now has among them,” Freeman said. “They are of course well aware that they cannot avoid a measure of reliance on America. The United States is still the only world power.”

He said Middle Eastern and other Asian countries are trapped in a Catholic marriage with the United States. “Much as some of them – the Iranians for example – might wish to send the United States packing, no divorce is possible,” Freeman said. “But of course they are Muslim and untroubled by polygamy, so they will construct new relationships to offset their still substantial ties to America. China and India in particular are happy to oblige.”

He said those two countries are the fastest growing large economies as well as the fastest growing markets for Persian Gulf oil and gas. “Over the decade to come, China and India are expected to account for half the growth in global energy demand,” Freeman said. “The spectacular rise of Asia’s industries east and south has fueled a boom in its energy-rich west.”

Chinese construction companies are building major projects in the Middle East, and generating images of towering cranes and shipping containers with consumer goods, Freeman said.

“Trade between the Persian Gulf area and China and India has been growing by 30 to 40 percent over the last decade,” Freeman said. “…We’re talking serious economic growth in Asia, with serious geostrategic consequences.”

The ties between East and West Asia are growing for reasons other than oil, engineers and consumer goods, Freeman said. “Arab investors are flush with cash,” Freeman said. “They once had a very strong preference for putting their money to work in the United States. American Islam-phobia and the reawakening of Islamic ties to China as well as Central and Southeast Asia are well along in curing them of this preference.”

And there is more to inter-Asian relationships than trade and investments, he said. “Islamic banking with its now very appealing avoidance of leverage and derivatives is as much a feature of finance in Malaysia as it is in the Persian Gulf. It’s being taken up in China and elsewhere.”

He also cited increased tourism, religious pilgrimages, language skills and student exchanges as part of the new-found integration.

“A few years ago some were stunned to see China’s president Hu Jintao shown around the world’s largest oil company, Saudi Aramco, by a series of Chinese-speaking Saudi graduates of China’s best engineering university,” Freeman said. “In China, dozens of universities and institutes now teach Arabic.”

Conflicts among Eastern Asian countries – for example India’s concerns with China or Japan being displaced as the No. 2 economy – are also being managed within the region. There is a huge free-trade area there, and supply chain relationships that connect all the countries, Freeman said.

“The importance of Southeast Asia as a crucible for Asian economic integration is hard to overstate,” Freeman said.

He said Russia stands somewhat apart from this integration, although is a source for weapons systems and a significant energy supplier. Freeman said Russia is more concerned with links to Europe.

“Russia’s future relationship with the rest of Asia remains a bit of a wildcard, as ill-defined and as undetermined as the Russian identity, Russian political system or Russia’s role in Europe and the Middle East,” he said.

Freeman said forecasts show that in 40 years, China should have a gross domestic product of more than $70 trillion. U.S. GDP is now $14 trillion, he said, with predictions that it could hit $35 trillion in 40 years. In that same year, 2050, India’s GDP will rival that of the United States, he said.

“The figures may be disputable but there is little reason to doubt that by mid-century the world’s economic center of gravity will be firmly lodged in Asia, somewhere between Beijing and Delhi,” Freeman said.

The rest of the world will be there alongside the Chinese, he said.

“A rising China and India will now lift all Asians,” Freeman said. “Asia has begun to lift the world.”

Freeman said no one should be surprised if Asia “resumes its seat at the head of the class.” And that will grow the prominence of Asian culture, as reflected in the popularity of sushi, martial arts, body piercing and Sudoku.

“What next from Asia,” Freeman said. “There will surely be something that now seems improbable. Before long we will make it too ours and forget its Asia origins.”

Freeman also discussed “the search for plausible enemies to replace the Soviet Union.” Two candidates, Islam and China, do not pass the test of being the next great enemy.

“Muslims desire to resume a place of dignity in the world’s affairs,” Freeman said. “That’s what you’re seeing in the streets today.” They want the United States gone from their land, and resent backing of Israel. “It is a menace to our military domination of the countries that profess it, not a challenge to the independence, values or security of a secular America,” Freeman said.

China is “hemmed in” by powerful neighbors such as Russia, India, Japan, Korea, and Vietnam, and the U.S. naval presence, he said.

“China faces too many immediate military, social and economic development problems to be able to follow the United States in attempting to dominate the world, even if it were tempted to do so,” Freeman said.

Freeman summed up by saying the “challenge to the United States is to harness Asia’s progress to our own, not to dominate the continent or retard its advances." The United States must make its own commitment to meet Asian innovation, education, prosperity and diplomacy, Freeman said. A policy must cover all of Asia.

“In some respects, the greatest challenge we face may be to see the continent as a whole, and to conceive our strategy and act accordingly,” Freeman said. “Understanding the increased interconnectedness of Asia is a prerequisite, both for restored American leadership there and for effective global governance in the decades to come. Both are sorely needed.”

Source: http://waldo.villagesoup.com

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