This report has used a pragmatic definition of Asia (Central Asia, East Asia and South Asia); this definition has proven useful in considering Asia’s long term economic prospects. But at the same time, it is important to recognize that Asia already has and will continue to have close economic political and security relations with countries and regions both near and far. For example, different Asian economies have strong economic relations and ties with countries nearby: with the Gulf countries and the Russian Federation for petroleum supplies; with Australia and New Zealand for food, coal and other minerals; and with Turkey as a conduit for trade with the Middle East and Europe. More recently, Asia’s giant economies, PRC and India, have followed the footsteps of Japan to seek closer economic ties with Africa and Latin America to secure access to both mineral resources and export markets. Many countries (e.g., ASEAN countries) have close political and security relations with the US as well as Australia. Such economic and political relations with other parts of the world will become even more important in the future. They must not be allowed to suffer even as Asian economies redouble their efforts at regional cooperation and integration.
Impact of national and regional 15 policies on others
As was vividly demonstrated during the 2007-9 Great Recession, in today’s globalized economy major developments or crises in the largest economies can lead to contagion in other parts of the world. Such transmissions are not limited to crises alone. Indeed, changes in major—monetary, exchange rate, fiscal, immigration-policies of large economies can have significant effects on others, both near and far. Accordingly, as the relative size of individual Asian economies and the region’s global footprint expands, the region will need to pay greater attention to the impact of its actions on others. While formulating their domestic or regional policy agenda, the region as a whole but also the larger economies—PRC, India, Indonesia, Japan and Republic of Korea—would also need to take into account the regional and global implications.
If it realizes the Asian Century, the region will need to significantly change its role in global governance and rulemaking. It will have to gradually transform its role as essentially a passive onlooker in the debate on global rulemaking and a reticent follower of the rules to being an active participant in the debate and a constructive formulator of the rules. How these global rules are formulated, supervised and implemented— WTO protocols, BIS rules, IMF guidelines and so on—can have an enormous impact on the costs and the competiveness of individual economies and economic entities. To play a proactive role in global rulemaking and enforcement, Asia must pursue a stronger regional stance in global international institutions (Financial Stability Forum, BIS, WTO, etc.) and political forums, such as the G-20, APEC and the UN Security Council. To perform a leading role in the above global apex decision making bodies, Asian leaders, in addition to responding to the proposals put forth by the traditional global powers (G-7/8), must be capable of proactively tabling their own constructive ideas and proposals. Given the complexity of the issues discussed in such bodies, Asian leaders will need to be supported by cadres of world class institutions and professional Experts-in related government bodies as well as local think tanks and academic institutions.
Clearly, not every country in the region can develop such capacities. Asia will therefore need to develop regional institutions and thinktanks for this purpose.
Managing Asia’s rise
Finally, Asia must delicately “manage” its rapidly rising role as a major player in global governance in a non-assertive and constructive way. As an emerging global leader, Asia should act and be seen as a Responsible global citizen.