Friday 22 November 2013

Asian Common Market needed (Pakistan Observer)

By M D Nalapat.
Friday, November 22, 2013 - If we correct for exchange rate distortions, Asia accounts for close to half the world’s GDP and more than half its population. However,as yet the much smaller continent of Europe carries more heft in the global order than the giant continent that is its neighbour. In the UN Security Council, while Europe has two seats and its presumed trans-Altantic cousin the US has another, Asia has a solitary place among the permanent members, that of China. Although more than three-fourths of financial savings originate in Asia while Europe and the US have negative savings, both the World Bank as well as the IMF continue to be dominated by the US-EU alliance.

As for the WTO, that agency has followed the US-EU agenda of forcing open markets to manufactures and services from the NATO bloc, while denying Asia similar benefits in the export of brainpower. A handful of pharmaceutical companies headquartered in the US and Europe have till now ensured that much of the rest of the world get deprived of cheaper medicine. The only way President Obama can universalize healthcare in the US and avoid his country going into open bankruptcy is by relying on pharma and other hospital products from India. Instead, he is leading the effort to block generic drugs from entering even markets where millions of the desperately poor require affordable treatment.

Thanks to such a shortsighted approach, Obamacare is on track to become a windfall not for critically ill patients but for Big Pharma The chokehold of NATO-based financial entities on the global financial system has survived the loss of $4 trillion by investors outside the bloc who trusted these entities to their cost during the 2008 meltdown. After a brief hiatus, speculation and profit-gouging have once again become the norm, assisted by fellow travellers trained in institutions that instill obedience to the interests of NATO member states in its pupils. India’s central bank, for example, is run by an individual who has spent more time in the US than in India, and who frames policy with an eye towards Wall Street rather than Dalal Street. In central banks and finance ministries across Asia, there are those in positions of high authority who function in a manner that will hurt their own economies to be benefit of those in the NATO bloc.

Reserve Bank Governor Raghuram Rajan of Chicago School of Economics fame is busy following his two immediate predecessors by handicapping domestic industry through higher and higher interest rates that even a beginner in economics knows is futile although disastrous to the domestic economy. Michael Spence, won a Nobel Prize in economics and thereby followed the pattern of such prizes going to those who uphold the dominance of NATO and its partners over the rest. Naturally, he is a booster of Rajan. For Spence and his ilk, the more pain suffered by domestic industry in India, the better for industry in the countries that he favours, who will thereby not have to face the same competition from Indian companies that they do from Korean, Japanese and Chinese enterprises

Scholars in Asia look at the world through lenses provided for them by Europe,which is why Asians see themselves as impossibly divided. There are almost no organisations that have a continental scope, barring the Asia Cooperation Dialogue which was last held in Kuwait. The GCC separates itself from the SCO, which in turn has nothing to do with ASEAN, which in turn keeps its distance from SAARC, which itself is far from APEC. These separate organisations need to form a coordinating mechanism that would bring them together on the same platform.

Such a coordinating agency could begin the process of an Asian Common Market. After all, economics is what is most important to most Asians, and there is zero doubt that such a common market would benefit the entire continent. Asia would grow faster as a result of such integration, and as a consequence, the rest of the world too would grow faster.

These were the conclusions reached by a conference on “Asia Uninterrupted” organised in the Manipal University campus by the Indian Council for Global Relations, otherwise known as Gateway House because its office is close to that iconic Mumbai landmark. At the conference, participants from across Asia ( including Ayesha Siddiqua of Pakistan) deliberated on ways to bring about better coordination between Asian countries. An important suggestion was a gas and oil pipeline from Russia through China that would branch off into Pakistan and India, thereby benefitting all four countries and bringing them together.

While there are certainly differences between various countries in Asia, the commonalities are much greater. Unfortunately, media and academic attention follows the pattern set by NATO-based thinktanks of acentuating the negatives and ignoring the positives. Such a bias must be removed, and scholars and officials across Asia accept that (1) the continent is as much a single if not unified entity as Africa, South America, North America and Europe and (2) working together makes more sense than working apart. Interestingly, many Asian scholars come across each other in Europe or the US rather than in their own continent. This must change. Asia needs to discover itself, and the first step towards that is to understand each other better, through changes in curricula and by travel. Most important, a sense of pride and hope needs to replace the litany of misfortune and outside conquest which permeates the teaching of history in schools. The bell is tolling. Unless an Asian Common Market begin to get formed, the world economy will continue to remain anaemic.

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