“Just as the world is moving towards multi-polarity, so is Asia … The economic fragmentation of the region and the competitive pursuit of security interests may well consign the Asian Century into a brief interlude rather than a millennial transformation”. Photo credit: Public domain via Wikimedia Commons

By Shyam Saran
NEW DELHI, Jun 1 2015 (IPS)

It has been apparent for some time that we are in the midst of a historic shift of the centre of gravity of the global economy from the trans-Atlantic to what is now becoming known as the Indo-Pacific.  

This is an emerging centre of economic dynamism and comprises what was earlier confined to the Asia-Pacific but now includes the South Asian region as well.

This is a region which now accounts for nearly 40 percent of world gross domestic product (GDP), which is likely to rise to 50 percent or more by 2050.  Its share of world trade is now 30 percent and growing.

Shyam Saran

This year, the region has become the largest source of foreign direct investment (FDI), surpassing the European Union (EU) and the United States. China has been the main driver of this historic shift, but other Asian economies have also made significant contributions.

As the Chinese economy begins to slow, India shows promise of regaining an accelerated growth trajectory under a new and decisive political leadership. This will help extend the scale and direction of this shift. Its geopolitical consequences will be profound.

It must be recognised that the economic transformation of Asia, in particular the spectacular growth of China, has been enabled by an unusually extended and liberal global economic environment, underpinned by the faith in globalisation and open markets.

It has also been enabled by a U.S.-led security architecture in the region which kept in check, though did not resolve, the long-standing political fault lines and regional conflicts over competing territorial claims and unresolved disputes.

This relatively benign and supportive economic and security environment is in danger of unravelling precisely at a time when the situation in the region is becoming more complex and challenging.  Paradoxically, this is partly a consequence of the very success of the region in achieving relative economic prosperity.“The danger is that instead of an inclusive and regionally integrated Asia, we may end up with exclusive and competing clusters, moving at different speeds, with different norms and standards. This may well undermine the very basis of Asia’s economic dynamism”

We are witnessing new trends in the region which, unless managed with prudence and foresight, may well sour the prospects of an Asian Century.

The relatively open and liberal trade and investment regime, in particular access to the large consuming markets of the United States, European Union and Japan, is now under serious threat.

Protectionist trends are already visible in these advanced economies as they struggle with prolonged economic stagnation which is the fall-out of the global financial and economic crisis of 2007-2008.

Instead of the consolidation and expansion of the open and inclusive economic architecture that had hitherto been the hallmark of the regional and global economy, we are witnessing its steady fragmentation.

In the Indo-Pacific region, there are competing regional trade arrangements and investment regimes, with no clarity on the contours of a new and emerging economic architecture.

The United States is spearheading its Trans-Pacific Partnership (TPP) which will include some Asian economies, but not India and China.

China has countered by proposing a free trade area encompassing the current Asia-Pacific Economic Cooperation (APEC) membership.  This will include China and the United States but not India and some of the Association of Southeast Asian Nations (ASEAN) economies.

The Regional Cooperation Economic Partnership (RCEP) would include all ASEAN countries plus China, Japan, Republic of Korea, India, Australia and New Zealand, but not the United States.

And finally, there is the East Asia Summit process (EAS) which includes all the above-mentioned countries but also the United States and Russia.

The danger is that instead of an inclusive and regionally integrated Asia, we may end up with exclusive and competing clusters, moving at different speeds, with different norms and standards.  This may well undermine the very basis of Asia’s economic dynamism.

In the security field, too, we are witnessing a growing salience of inter-state tensions and competitive military build-up.

The U.S.-led security architecture remains in place formally but its erstwhile predominance is diminished.

The gap between the military capabilities of China and the United State is closing steadily. As China’s security footprint expands beyond its shores, it will inevitably intersect with the existing deployment of the forces of the United States and its allies and partners.

Faced with an increasingly uncertain security environment and threatened by a more insistent assertion of territorial claims by China, the countries of the region, including Japan, Republic of Korea, members of ASEAN, Australia and India are building up their own defences, in particular maritime capabilities, and this itself is escalating tensions.

There is as yet no emerging regional security architecture which could help manage inter-state tensions in the region. This includes the growing possibilities of confrontation between the United States and China.

In the absence of such a regional security architecture, based on a broad political consensus and a mutually acceptable Code of Conduct, the region may well witness a heightening of tension and even conflict.  These developments would inevitably and adversely impact on the dense network of trade and investment relations that bind the countries of the region together and erode the very basis of their prosperity.

In this context, mention may be made of the Chinese One Belt One Road (OBOR) initiative which seeks to deploy China’s surplus capital to build a vast network of transport and infrastructural links not only across the Indo-Pacific but also straddling the Eurasian landmass.

The newly established Asian Infrastructure Investment Bank (AIIB) initiated and led by China would become a key financing instrument for the OBOR.  China has also recently come out with a new Defence White Paper, which puts forward a new strategy of Open Seas, shifting the emphasis from coastal and near sea defence to an expanding naval presence which matches China’s growing global profile and world-wide location of Chinese-controlled economic assets.

While China’s investment in regional infrastructure in Asia may be welcome, it will inevitably be accompanied by a security dimension which may heighten anxieties among countries in the Asian region and beyond.

It is apparent from the above analysis that it is no longer possible for any major power in the Indo-Pacific to unilaterally seek a position of overweening economic dominance or military pre-eminence of the kind that the United States enjoyed over much of the post-Second World War period.

Just as the world is moving towards multi-polarity, so is Asia.  It is now home to a cluster of major powers with significant economic and security capabilities and interests. The only practical means of avoiding a unilateral and potentially destructive pursuit of economic and security interests would be to put in place an inclusive economic architecture underpinned  by a similarly inclusive security architecture which provides mutual reassurance and shared opportunities for promoting prosperity.

The economic fragmentation of the region and the competitive pursuit of security interests may well consign the Asian Century into a brief interlude rather than a millennial transformation. (END/COLUMNIST SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Novice monks beg for alms near the Sule Pagoda in downtown Yangon. The barbed wire barricades behind them were once a permanent feature on this busy road, but have been pushed aside to make way for peace. Credit: Amantha Perera/IPS

By Amantha Perera
YANGON, Nov 23 2014 (IPS)

Myanmar is never out of the news for long. This has been the case since a popular uprising challenged military rule in 1988. For over two decades, the country was featured in mainstream media primarily as one unable to cope with its own internal contradictions, a nation crippled by military rule.

Since 2011, with the release of pro-democracy icon Aung San Suu Kyi from house arrest, as well as democratic reforms, the country experienced a makeover in the eyes of the world, no longer a lost cause but one of the bright new hopes in Asia.

U.S. President Barack Obama has visited the country twice since 2011, most recently this month for the 9^th annual East Asia Summit (EAS).

But beneath the veneer of a nation in transition, on the road to a prosperous future, lies a people deep in poverty, struggling to make a living, some even struggling to make it through a single day.

The commercial capital, Yangon, is in the midst of a construction boom, yet there are clear signs of lopsided and uneven development. By evening, those with cash to burn gather at popular restaurants like the Vista Bar, with its magnificent view of the Shwedagon Pagoda, and order expensive foreign drinks, while a few blocks away men and women count out their meagre earnings from a day of hawking home-cooked meals on the streets.

The former likely earn hundreds of dollars a day, or more; the latter are lucky to scrape together 10 dollars in a week.

The World Bank estimates that the country’s 56.8-billion-dollar economy is growing at a rate of 8.5 percent per year. Natural gas, timber and mining products bring in the bulk of export earnings.

Still, per capita income in this nation of 53 million people stands at 1,105 dollars, the lowest among East Asian economies.

The richest people, who comprise 10 percent of the population, control close to 35 percent of the national economy.

The government says poverty hovers at around 26 percent of the population, but that could be a conservative estimate.

According to the World Bank’s country overview for Myanmar, “A detailed analysis – taking into account nonfood items in the consumption basket and spatial price differentials – brings poverty estimates as high as 37.5 percent.”

The country’s poor spend about 70 percent of their income on food, putting serious pressure on food security levels.

But these are not the only worrying signs. An estimated 32 percent of children below five years of age suffer from malnutrition; more than a third of the nation lacks access to electricity; and the national unemployment rate, especially in rural areas, could be as high as 37 percent according to 2013 findings by a parliamentary committee.

Over half the workforce is engaged in agriculture or related activities, while just seven percent is employed in industries.

Development banks call Myanmar a nation in ‘triple transition’, a nation – in the words of the World Bank – which is moving “from an authoritarian military system to democratic governance, from a centrally directed economy to a market-oriented economy, and from 60 years of conflict to peace in its border areas.”

The biggest challenge it faces in this transition process is the task of easing the woes of its long-suffering majority, who have eked out a living during the country’s darkest days and are now hoping to share in the spoils of its future.

Edited by Kanya D’Almeida

Novice monks beg for alms near the Sule Pagoda in downtown Yangon. The barbed wire barricades behind them were once a permanent feature on this busy road, but have been pushed aside to make way for peace. Credit: Amantha Perera/IPS

By Amantha Perera
YANGON, Nov 21 2014 (IPS)

Myanmar is never out of the news for long. This has been the case since a popular uprising challenged military rule in 1988. For over two decades, the country was featured in mainstream media primarily as one unable to cope with its own internal contradictions, a nation crippled by violence.

Since 2011, with the release of pro-democracy icon Aung San Suu Kyi from house arrest, as well as democratic reforms, the country experienced a makeover in the eyes of the world, no longer a lost cause but one of the bright new hopes in Asia.

U.S. President Barack Obama has visited the country twice since 2011, most recently this month for the 9^th annual East Asia Summit (EAS).

But beneath the veneer of a nation in transition, on the road to a prosperous future, lies a people deep in poverty, struggling to make a living, some even struggling to make it through a single day.

A woman loads bags full of vegetables on to a train carriage in Yangon. Many use the slow-moving passenger trains to transport goods that they will sell in outlying villages, since few can afford road transportation. Credit: Amantha Perera/IPS

Arranging vegetables into small bundles, this vendor tells IPS she wakes up at three a.m. three days a week to collect her produce. She makes roughly three dollars each day. Credit: Amantha Perera/IPS

The commercial capital, Yangon, is in the midst of a construction boom, yet there are clear signs of lopsided and uneven development. By evening, those with cash to burn gather at popular restaurants like the Vista Bar, with its magnificent view of the Shwedagon Pagoda, and order expensive foreign drinks, while a few blocks away men and women count out their meagre earnings from a day of hawking home-cooked meals on the streets.

The former likely earn hundreds of dollars a day, or more; the latter are lucky to scrape together 10 dollars in a week.

A woman waits for passersby to buy bird feed from her in Yangon. The World Bank estimates that over 30 percent of Myanmar’s 53 million people lives below the national poverty line. Credit: Amantha Perera/IPS

A man pushes a cartful of garbage near a busy intersection in Yangon. The 56-billion-dollar economy is growing at a steady clip of 8.5 percent per annum, but the riches are obviously not being shared equally. Credit: Amantha Perera/IPS

The World Bank estimates that the country’s 56.8-billion-dollar economy is growing at a rate of 8.5 percent per year. Natural gas, timber and mining products bring in the bulk of export earnings.

Still, per capita income in this nation of 53 million people stands at 1,105 dollars, the lowest among East Asian economies.

The richest people, who comprise 10 percent of the population, control close to 35 percent of the national economy. The government says poverty hovers at around 26 percent of the population, but that could be a conservative estimate.

According to the World Bank’s country overview for Myanmar, “A detailed analysis – taking into account nonfood items in the consumption basket and spatial price differentials – brings poverty estimates as high as 37.5 percent.”

A man collects his harvest from a vegetable plot that is also a putrid water hole just outside of Yangon. The World Bank estimates that at least 32 percent of all children below five years of age in Myanmar suffer from malnutrition. Credit: Amantha Perera/IPS

Women walk with heavy loads after disembarking from a train. Thousands still rely on the dilapidated public transport system, with its century-old trains and belching buses, because they cannot afford anything else. Credit: Amantha Perera/IPS

The country’s poor spend about 70 percent of their income on food, putting serious pressure on food security levels.

But these are not the only worrying signs. An estimated 32 percent of children below five years of age suffer from malnutrition; more than a third of the nation lacks access to electricity; and the national unemployment rate, especially in rural areas, could be as high as 37 percent according to 2013 findings by a parliamentary committee.

Over half the workforce is engaged in agriculture or related activities, while just seven percent is employed in industries.

Democracy icon Aung San Suu Kyi admits that Mynmar suffers from a long list of woes, but insists that the first step to healing is the return of the rule of law. Credit: Amantha Perera/IPS

Large-scale construction is not unusual in downtown Yangon, where foreign investments and tourist arrivals are pushing up land prices. Officials say they expect around 900,000 visitors this year. Arrivals have shot up by 49 percent since 2011. Credit: Amantha Perera/IPS

Development banks call Myanmar a nation in ‘triple transition’, a nation – in the words of the World Bank – which is moving “from an authoritarian military system to democratic governance, from a centrally directed economy to a market-oriented economy, and from 60 years of conflict to peace in its border areas.”

A man pushes his bicycles laden with scrap in the streets of Yangon. Despite rapid economic growth, disparities seem to be widening, with 10 percent of the population enjoying 35 percent of Myanmar’s wealth. Credit: Amantha Perera/IPS

The biggest challenge it faces in this transition process is the task of easing the woes of its long-suffering majority, who have eked out a living during the country’s darkest days and are now hoping to share in the spoils of its future.

 Edited by Kanya DAlmeida