Region's leaders take stand on synergy

June 11, 2001

Asia specialists urge cooperation at all levels, economic management

Staff writer

At the 7th International Conference on "The Future of Asia," sponsored by Nihon Keizai Shimbun Inc., specialists on the region stressed the importance of cooperation in East Asia and Japan's economic recovery. Three keynote addresses were delivered by prime ministers: Mahathir Mohamad of Malaysia, Phan Van Khai of Vietnam and Hun Sen of Cambodia. Following are highlights from the conference, held in Tokyo June 7-8.

-- IT industry's role in Asia

Min Weifang, chairman of Peking University Founder Group Corp., stressed the importance of close cooperation between enterprises and universities.

"It has played an important role, and will play a more important role in promoting development of IT in Asia." Although Min admitted China's information-technology industry is still backward in both hardware manufacture and software development, the IT industry is growing fast thanks to its great potential in human resources and the size of its market.

Narayana Murthy, chairman and chief executive officer of Infosys Technologies Ltd., said the software industry in India contributes to the country's economy through its exports and creation of jobs.

"In order to come to an acceptable level of employment in the country, we have to create at least 4-5 million jobs every year for the next 10-15 years. The software export industry is now creating 200,000 jobs each year," he said.

To combat poverty in developing countries, Murthy said, it is important to encourage entrepreneurship to build their economies. Citing the stock options offered to his company's 9,000-plus workers, he said the IT industry can disperse wealth among the people.

Koji Nishigaki, president of NEC Corp., said that Asia itself must become a large IT market so it will not be affected by recessions in North America or Europe. "If Asia's economy grows, the world economy can grow, too," he said.

-- Financial market and cooperation

Thanong Bidaya, economic adviser to the prime minister and former finance minister of Thailand, said regional cooperation among Asian countries is necessary to vitalize financial markets and prevent economic crises in the region. Thanong said, "It is an inescapable fact that whatever economic course they take, both Japan and China will have an undoubtedly deep impact on the development of a workable Asian financial market."

Masaru Yoshitomi, dean of the Asian Development Bank Institute, said it is important to create a system to provide a lender of last resort within the region to avoid a repeat of the 1997 economic crisis.

Pointing out the importance of stabilizing exchange rates for Asian countries, he suggested developing a currency basket linked to major currencies such as the dollar, euro and yen. "I think a common Asian currency could become a reality, if we begin with a currency basket and cooperate in macroeconomic policy."

Kenji Yoshizawa, deputy chairman of Bank of Tokyo-Mitsubishi, also suggested introduction of a comprehensive rule to protect foreign-exchange markets from excessive speculation. He added, however, such a change should be carried out gradually to avoid confusion.

-- Scenarios for regional integration

Noordin Sopiee, chairman of the Institute of Strategic and International Studies of Malaysia, advocated his own "Ten Commandments" for regional integration in Asia.

Some of them are: "Cooperation must be outward-looking; it should aspire to be an example in North-South relations, showing what can be accomplished when we seek 'win, win, win' solutions; it must proceed on the basis of mutual respect and mutual accommodation and with the stress not on producing paper but on progress, not on building institutions but on results, slowly evolving, slowly and quietly accomplishing, according to our Asian way."

Supachai Panitchpakdi, former deputy prime minister and commerce minister of Thailand, said that regional integration should be compatible with the World Trade Organization's basic ideas. And negotiations to promote integration should cover all areas including the agriculture sector.

Yoo Sang-boo, chairman and CEO of Pohang Iron and Steel Co. of South Korea, said that regionalism advocated by developed countries pursues economic profit rather than political ideology and East Asian countries should consider economic integration in terms of protecting themselves.

"It is most realistic and idealistic that South Korea, China and Japan first form a small economic community, then the Association of Southeast Asian Nations will be integrated into the community," he said.

Shigeji Ueshima, chairman of Mitsui & Co., pointed out that corporate activities have already gone beyond national boundaries. He said he expected both public and private sectors to jointly promote free-trade agreements.

Referring to a free-trade zone in Asia, Ueshima said: "Based on competition and coexistence including China, a win-win relation will be created in the long term."

-- Japan's role in economic growth of Asia

Lim Hng Kiang, minister for health and the second finance minister of Singapore, said that Japan can resume its role as an engine for economic development for the region when it restores its economy to health. Japan's sustained economic development is the best guarantee for regional peace and stability, Lim said.

Yoichi Morishita, chairman of Matsushita Electric Industrial Co., stressed the importance of Japan's economic recovery. "Structural reform of the economy must be promoted speedily, through further opening of domestic markets and through deregulation," he said.

In addition, it is important that Japan take the initiative in liberalization by such moves as the ratification of the free trade area treaty with Singapore and South Korea.

Taku Yamasaki, secretary-general of the Liberal Democratic Party, indicated Japan will increase official development assistance for Asian countries. "As ODA is the most important diplomatic measure for Japan, it should be carried out intensively and strategically," said Yamasaki.

-- Indonesia's search for democracy

Nurcholich Madjid, rector of the University of Paramadina Mulya of Indonesia, acknowledged people's concern about the future of Indonesia. He said that the economic crisis that befell the nation in 1997 has grown into a crisis of multiple dimensions.

"One of the worst effects is political, which, in combination with several other factors, has driven President Abdurrahman Wahid into the distressing situation he is encountering today," Majid said.

Indonesia is now searching for a way to attain democracy, Madjid said. He also noted that it will be difficult for Wahid to serve his full tenure until 2004 if he does not respond to criticism properly. However, the turmoil that occurred in Jakarta in 1998 will not happen again, because students will try to find an alternative solution, he said.

(The Nikkei Weekly June 11 Issue)

Titles of speakers, names of companies, etc., were correct as of the time when the forum was held.