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Analysis
Asia’s stand-offishness towards the West

Asia’s stand-offishness towards the West

by David Marsh in Kuala Lumpur

Mon 16 Aug 2010

A dastardly tale, many people believe, is unfolding the world over: Asia is hell-bent on winning economic domination over the West. Where’s the evidence? India, China & Co. seem to be supplying the growth momentum for the global economy. Monetary reserves (though not gold) are piling up everywhere throughout Asia. Takeover bids from the east are popping up incessantly in news headlines. Wherever you look, there is Angst over the eastwards shift in the world economic balance of power.

But if you put Asia under the microscope, it becomes clear that the strategic master plan to bring the West’s product and financial markets under oriental control is a work of fiction. Despite the excellent growth figures and the undeniable economic achievements of recent years, Asia remains preoccupied with his own problems. Its interest in the rest of the world is still relatively small.

Some of these challenges are caused by natural disasters we have experienced in recent days – the dramatic floods and landslides in India, China and Pakistan. Others are grounded in the painful downside of global economic acceleration – increased polarization between rich and poor, potentially explosive for internal stability.

For all the de facto accumulation of economic power, the Asians are simply not interested in taking over any kind of institutional leadership of the world financial system. The issue of a possible candidate from Asia for the next Managing Director of the International Monetary Fund is seemingly of little relevance for Asian government and finance people. Incumbent Dominique Strauss-Kahn may wish to step down next spring to fight the French presidential election, but it is virtually impossible that the Asian states could or would agree on a joint candidate to succeed him.

Furthermore the Asians show little enthusiasm for new approaches in international corporate governance or for global economic decision-making. Instead of thinking about reforms many of them believe they are either discriminated against or marginalised by existing political processes as in the G20 process. Thanks to the increases in their own currency reserves, the Asians are hardly in the mood for extensions of their own regional institutional networks, for example in further developing swap lines and mutual support mechanisms, let alone in adding to overall international cooperation.

And already low willingness to give up national sovereignty by creating some sort of an Asian currency area has now been brought down close to zero by the effects of the euro crisis.

All in all, a sorry tale. In the west, discontent is spreading over loss of economic power. And in the east, disdain over the relative decline of the Europeans and Americans coexists with stand-offishness over any attempt to improve global economic structures. Power without responsibility is a bad combination. East and West need each other over the long-term. The present impasse is a blot on the international economic order.

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