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– by Eleonore von Bothmer
Asian countries have made great efforts to attenuate the devastating consequences of the economic downturn: China has spent 14 % of its gross domestic product (GDP) on stimulus measures, and frontrunner Thailand has event spent up to 22 %. Germany’s stimulus expenditure, by comparison, amounted to no more than 2.6 % of GDP.
The swift and comprehensive action taken by governments benefit all economies, because they are closely intertwined today. Therefore it is impossible for any country to dissociate from the worldwide crisis, as Aladdin D. Rillo of the Secretariat of the Association of Southeast Asian Nations (ASEAN) pointed out.
“Of course, Asia’s speedy recovery is advantageous for Germany too, as it results in the general increase of commerce and business,” agreed Ingrid-Gabriela Hoven of Germany’s Federal Ministry for Economic Cooperation and Development (BMZ). On the other hand, she also called into memory that two thirds of the world’s poorest people live in Asia and many have fallen back into poverty. Germany is supporting Asian governments in several fields that are of developmental relevance including sustainable business strategies, microfinance and social security. So far, 80 % of the Asian population have no health insurance; two thirds have no pension plan. Hoven argued that “many problems can only be solved together and therefore we need a cooperative world model.” Once again, this was demonstrated by the crisis.
To Charivat Santaputra, Thailand’s ambassador to Germany, the G20 summit has shown the demand for more regulation. He argues that cooperation is most important in the sectors of energy and mobility and that every nation needs to become more ecological. He suggested that Europe and especially Germany forge “green alliances” with Asian countries.
Sudhir Vyas, India’s ambassador in Berlin, emphasised that the crisis “started in the West” and was caused by dysfunctional global finance regulation. At a discussion forum organised by InWent as an overture to the 7th Asia-Pacific Weeks in Berlin, Vyas said the essential question now was how similar catastrophes are to be prevented in future.
Santosh Kumar of the Indian Council for Research on International Economic Relations (ICRIER) had a proposal. In his eyes, what is needed is a global stability mechanism for world trade and a reorganisation of the global economy. This would include institutional reforms, not just at the Bretton-Woods institutions, but also in the informal circles of the G7 or the G20.
ASEAN officer Rillo stressed the necessity of cross-border crisis management. Amongst other things, this would involve:
– better assessment of risks,
– new regulatory mechanisms,
– common reserve funds, and
– regional economic monitoring.
In Rillo’s view, these measures are essential for creating an adequate regulatory environment for banks. However, according to Rillo, a spirit of cooperation is also needed: “We need a common language, a common strategy.”
He shares that concern with Rüdiger Freiherr von Fritsch of Germany’s Foreign Office – particularly with regard to the climate summit in Copenhagen in December: “What we need now is a clear statement as to who will contribute what,” Fritsch says, adding that the industrial countries must be the pioneers.
Von Fritsch considers Asia the most dynamic industrial area of the world; therefore the cooperation is of particular importance to Europe. In Berlin, von Fritsch reiterated that innovations are at the centre of growth and enhanced investment opportunities are beneficial to all. Moreover, he compared the ASEAN to the EU, the latter having already proven the benefit of regional integration.
Eleonore von Bothmer