LOOK at China, Japan and South Korea as newfound friends in foul weather or simply see their latest Tripartite Partnership as just a manifestation of the now-fashionable trend of deepening the network among major economies. Either way, it will be too naive to miss the potential political importance of the launch of this unusual partnership under Japans initiative on December 13.
For now, the event has not attracted much attention amid a multitude of global concerns. The three parties themselves have not collectively gone far beyond trumpeting the historic symbolism of their new club. Japanese Prime Minister Taro Aso, his Chinese counterpart Wen Jiabao and South Korean President Lee Myung-bak met at Fukuoka in Japan and floated the partnership after discussing the current worldwide financial crisis.
The three countries are still seen widely as strange bedfellows, especially under the political prism of conventional wisdom relating to the causes, course and consequences of the Second World War. Unsurprisingly, therefore, there is more to this new Tripartite Partnership than meets the eye in the common political space that China, Japan and South Korea have now given themselves.
Two interrelated issues flow from the action of the three leaders. Will the Tripartite Partnership turn out to be a prelude to a new global economic order? And, has India once again missed the bus in such epochal economic diplomacy with political overtones?
Answering questions like these from this correspondent on December 18, World Bank President Robert Zoellick took a line indicative of no dramatic shifts in the balance of forces in todays global economy. The thrust of Zoellicks reply was:
[The Tripartite Partnership] represents a deepening network of ties that you see not only at the regional but also, I hope, [at the] global level. A number of those countries have also been a part of swap lines, as is Singapore with the United States Federal Reserve which is an innovation designed to try to stay ahead of some of the risks of troubles in the international currency markets. I wouldnt see this as a negative for India or other countries; and indeed, India has itself been very active in deepening its ties throughout the South-East Asian region. One of the strengths of Singapore as a hub is that it is a point of interconnection with India as well as China.
Each country faces different challenges in this economic crisis. China has the advantage of a particularly strong reserve and budgetary position. India has come a long way in the past 17 or 18 years in terms of growth. But it also has challenges that we at the Bank are trying to help address. So, we will be expanding our lending considerably to India. So, I wouldnt see these steps [by China, Japan and South Korea] as zero-sum or competitive. And we at the World Bank are also part of that effort [of networking by major economies].
The poser really is not whether the World Bank, a key economic body that owes its origin to the so-called Washington Consensus and the Bretton Woods process which followed the Second World War, is now missing some new signs. More specifically, the present puzzle is whether Japan, an avid supporter of the Washington Consensus in politics and a one-time innovator in search of an Asian variant of the International Monetary Fund (IMF), is now finding new friends.
Top Japanese spokesman Kazuo Kodama told Frontline that the new Tripartite Partnership had nothing to do with the perceptions in some quarters that Barack Obama as the next U.S. President might not stay as focussed on East Asia as the earlier administrations in Washington were.
Evident from the official Japanese accounts and those of other diplomatic sources is the fact that the new Fukuoka consensus culminated in the Tripartite Partnership on the basis of a process that began in 1999. It was then that the leaders of Japan, China and South Korea met for the first time since the Second World War. That meeting and all other subsequent summit-level contacts between the three countries took place on the sidelines of multilateral conferences. It was during one such meeting in 2007 that the then Japanese Prime Minister, Yasuo Fukuda, suggested to China and South Korea that a process of stand-alone trilateral summitry be started. A September 2008 date was set for the first plenary summit between China, Japan and South Korea. It was postponed later in view of the political changes in Japan. The logistic genesis of the summit, as held now, has its roots in such previous contacts.
On a different but related plane, the political genesis of the Fukuoka consensus was facilitated by the current worldwide financial and economic crises. Japan, still the worlds second largest economy, is in recession. China, too, is taking steps to address an economic slowdown (not to be confused for recession, whose hallmark is negative growth over a universally recognised time frame). And South Korea is in the throes of a currency crisis.
In a sense, the more immediate context of the Fukuoka consensus was the need felt by South Korea to raise the limits of its bilateral currency swaps with China and Japan on two altogether parallel tracks. Under these new arrangements, Seoul can now draw up to a maximum of a $30-billion equivalent of Chinese currency and a $20-billion equivalent of Japanese yen in exchange for funds denominated in South Korean money. These agreed currency swaps, an extension of the facilities permitted under the existing Chiang Mai Initiative, have been made possible by a new sense of fraternity among these three North-East Asian states in foul economic weather.
China, Japan and South Korea have had enormous historical connectivity. This not only dates back to the economic geography and geopolitical realities of the Second World War but also has to do much with the phenomenon of economic tigers in recent decades. From the mid-20th century, the U.S., while taking under its security wings an erstwhile enemy, Japan, with its post-imperial democratic label, ceded enormous political space to it to boost its war-ravaged economy.
It was the Yoshida Doctrine of the mid-20th century that enabled Japan to try and develop economic links with China. Japans overture towards China then, despite Japanese atrocities in the run-up to and during the Second World War, is in a sense the historical foundation, if not the springboard, for their present ties.
And that overture was made possible, in the first place, by the dictates of the Yoshida Doctrine that effectively freed Japan from security costs. The doctrine was driven by U.S. perception in the 1950s that Japan was the best theatre for forward deployment of the U.S. forces to meet threats from the then-vibrant Soviet Union and a rising Peoples Republic of China (PRC).
A lot of political and economic networking has occurred since the mid-20th century between the U.S., Japan and China. And the emerging PRC of the 1950s, a political novelty to the West then, is today seen in many parts of the world as a rising economic giant, a potential superpower, which needs to be engaged and not needlessly confronted. It is in this updated context that Japan has now evolved the new Trilateral Partnership with China and South Korea, being obviously mindful of the economic crisis in the U.S. and elsewhere in the developed bloc. Although the partnership has been fashioned by the political watch of the three East Asian countries over a period of nearly a year, non-official experts know that the relative decline of the U.S. began in this region even earlier.
Policy planners across East Asia do not, of course, talk glibly about the U.S. being on a relative-decline trajectory; instead, they often speak of Washingtons continued relevance to Asia-Pacific peace and stability. However, Official Tokyos proactive role in the formation of the Trilateral Partnership is proof of the willingness of major East Asian powers to try and keep their economic houses in order so as to be able to hedge against any U.S. decline. The irony is rich in the case of Japan, which was once accused of trying to wreck the Bretton Woods order by working for the creation of an Asian Monetary Fund in all but name.
However, the Trilateral Partnership shows that Japan does not want to stay the course in a geostationary orbit around the U.S. as its satellite in the domain of strategic affairs. This means that Japanese leaders want to shuffle across their own geopolitical space, even while continuing to recognise the importance of Tokyos strategic links with Washington as of now. One option for Japan now is to try and improve its economic ties with China in an overall political ambience of a changing U.S. posture.
China, too, needs to keep its ties with Japan on an even keel; this process has been evident for some time, most recently when the two countries agreed that they did not pose a threat to each other. In a sense, that agreement in principle was in itself a springboard for this latest Trilateral Partnership. Chinas moves of this kind go beyond the obvious purpose of serving as a hedge against the changing U.S. posture. A paramount policy objective of the Chinese leaders is to elevate their country to the status of a developed economy as quickly as possible through prudent measures. The Tripartite Partnership is entirely consistent with this objective and may even help promote it.
For Japan, the Trilateral Partnership is the second exercise involving two other countries in the broader East Asian context. The Japan-U.S.-Australia security dialogue does, of course, mean that the U.S. is flanked by its two military allies in the region. In this sense, this grouping is different from the Trilateral Partnership, which obviously has no military dimension, although issue-based political cooperation between China, Japan and South Korea is not at all ruled out. However, this Trilateral Partnership is much more institutionalised than the India-China-Russia arrangement, which is essentially a forum for exchange of ideas with no definitive military or political or economic partnership as such. Moreover, the China-Japan-South Korea partnership is the result of years of dialogue on many issues.
Relevant to this proliferation of inter-state linkages in the broader East Asian region is the idea of a China-U.S.-India dialogue on a regular basis. This idea was recently commended by a Beijing-based Chinese expert, Zhang Yunling, in reply to this correspondent. Relevant to this idea are the independent opinions by Rajat Nag, Managing Director-General of the Asian Development Bank, and Ilian Mihov, Economics Professor at INSEAD, Singapore, on the importance of India to East Asia. They indicated that China and India could still be the drivers of growth in Asia in the present gloomy global economic climate.
On an altogether different front, a new grouping in the name and style of Bali Forum of Democracy has been floated. The initiative came from Indonesia, whose President, Susilo Bambang Yudhoyono, has in the past few years sought to stabilise a democratic form of government in his country. Indonesia was the most conspicuous political victim of the 1997-2000 financial crisis in East Asia although Thailand too did experience some political turmoil during that period of economic hardship.
Going into a political free fall in that context, Indonesia witnessed a socially painful reform movement, which led to the downfall of the then autocratic ruler, Suharto. A fragile period of democratic trials and errors followed. With elective politics first gaining currency, Susilo, the countrys first directly elected executive President, later began a process of democratic consolidation. While this has provided a political context for the Bali initiative, neighbouring Australia has, in a sense, played a key role in firming up the Indonesian effort through financial and political support. The initiative is now focussed mainly on the Asia-Pacific region and willing partners in the rest of Asia.
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