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Asia and Europe
Wednesday, 08 February 2012 05:02

Euro-bashing is now becoming a fad.

According to distinguished Australian economist Warwick McKibbon, Europe is guilty of decades of government failure -- it is "the region of choice for what not to do economically".  Former Malaysian Prime Minister Dr Mahathir recently said "in Asia we live within our means. So when we are poor, we live as poor people. I think that is a lesson that Europe can learn from Asia."

But how fair and balanced are these criticisms of Europe?

Of course, Europe has deep problems at the moment with the euro crisis.  But it is still a major player on the global scene and has many underlying strengths.

The European Union remains the world's largest economy. Its GDP, in purchasing power parity terms, was estimated at US$14.8 trillion in 2010, with the US economy ranked second at US$14.7 trillion and China third at US$10 trillion.  The euro area is the world's leading exporter.

Of the world's top 15 nations for offshore investment, seven are European, namely France, Germany, Italy, Norway, Sweden, Ireland and the UK.  More than one-third of the world's largest corporations are headquartered in Europe.  More than one-third of the companies in Interbrand Top 100 Global Brand Index are European (half are from the US and the rest are mostly Japanese).

The EU produces one-third of the world's total scientific publications, making it the largest scientific centre in the world.  In 2008, Germany, France, the UK, Italy and Spain were all among the top 10 biggest spenders on R&D on the planet.  30 of the world's top 100 universities are European.  And one half of all Nobel Laureates have been European.

All of this is no mean feat for a continent which has been accused of getting everything wrong!  We should not also forget that these achievements rest on the shoulders of robust democracies, something which very few Asian countries have managed to achieve -- most notably Dr Mahathir's Malaysia which jails political opponents on trumped up charges.

Europe is the birthplace of the idea of 'the West', which is based on freedom: open societies, open economies, open politics, the freedom of academic inquiry, the compatibility of faith and reason, the secular pluralist state.  These values are also reflected in the economy – in the free flow of ideas, of capital, of commerce, in open markets, both at home and abroad.

Like all systems and orders, Europe and the US are now going through renewal projects, following their crises, drawing on the deep, fundamental strengths of both continents.  But there is every reason to hope and believe that this process of renewal will succeed -- even if the process is messy and drawnout.

It is natural at such a time to marvel at the great success of Asia, especially the re-emergence of China and India.  At the same time, we must recognize that this success has greatly benefited from openness to Western markets and access to Western knowledge.  The children of virtually all Asia leaders, including North Korea, are educated in Western countries.

And while war and conflict between Western countries is now totally unthinkable, Asia in the 21st century is a place of deep strategic uncertainty, long historic enmities and longstanding unresolved territorial disputes, in short, every conceivable strategic instability known to man.

There is a nervous truce on the Korean Peninsula, the world's most heavily armed zone, cast into fresh uncertainty with the assumption of power by Kim Jong-un.  We have territorial disputes including the South China Sea, the East China Sea and the Sea of Japan. Then there is the Taiwan Straits.  Going to the Indian sub-continent, the unresolved disputes between India and Pakistan.  And many of these disputes involve nuclear weapons states and/or those who are in the process of nuclear weapons proliferation.  These are disputes of real tension that, in the context of rising powers, have a real risk of spilling over into live confrontation.  And the consequences of a mis-step in Asia this century are potentially global in scale.

With its dramatic economic renaissance, China is quite legitimately seek to regain its place in a region, where the United States has long been the dominant power.  The challenge is to help ensure that the rise of China is accommodated peacefully within the global and regional rules-based order; that India is encouraged to play its full, natural role as a major democratic power in Asia; and that the rest of Asia is able to preserve its sovereignty and maximise its prosperity in the process.

Security in the Asia Pacific has not been underwritten by the same sorts of institutional mechanisms that have served the Euro-Atlantic so well in the post-war period.  Asia does not even have common foundations derived from a common set of values.  Europe has so much to offer Asia both from its experience and security and foreign policy voice to help shape this emergence of a sense of common security across wider Asia.

The East Asia Summit, with last year's inclusion of the United States and Russia, is a promising arena for working on security issues in the region.  It may help harmonize common interests and ensure that the cultures, habits and institutions of the region are capable of managing (and perhaps even resolving) conflicting interests when they arise.

But Asia still has a very long way to go in ensuring the region's security.  This is perhaps the region's most important agenda, because as history shows, military conflict can cause more economic damage than any financial crisis.

References:

McKibbon, Warwick.  Catching Europe's Ills.  Financial Review.  6 February 2012.

http://afr.com/p/opinion/catching_europe_ills_TZbKINq8hwjOxdsprFWfjI

BBC News.  "Europe is poor so should live within its means"

http://www.bbc.co.uk/news/business-16918000

Much of the data comes from some recent speeches by Kevin Rudd, Australia's minister for foreign affairs

Remarks to the panel discussion 'America, Europe and the Rise of Asia'.  Munich Security Conference.  4 February 2012

http://www.foreignminister.gov.au/speeches/2012/kr_sp_120204.html

Europe, Asia and Australia: New imperatives for cooperation, Address to the North Atlantic Council of the North Atlantic Treaty Organization, Brussels, Belgium, 20 January 2012

http://www.foreignminister.gov.au/speeches/2012/kr_sp_120120.html

Fault lines in the 21st century global order: Asia rising, Europe declining and the future of 'the West', Speech to the Royal Institute of International Affairs, Chatham House, London, 24 January 2012

http://www.foreignminister.gov.au/speeches/2012/kr_sp_120124.html


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