Beijing consensus

The ASEM summit in Beijing turns out to be a brain-storming session on the global economic crisis.

in Singapore

IT was a real-life drama of political leaders seeking to make sense of a gathering storm that threatened to swamp or hurt many real economies around the world, in late October. The leaders from Asia and Europe, who met in Beijing from October 23 to 25, could of course do no more than think of ways to evolve a political consensus on the complexion of a possible worldwide recession. There was no realistic hope of blueprinting a workable plan of action quickly to counter the global economic storm.

The political limitations of the seventh Asia-Europe Meeting (ASEM) in Beijing had nothing at all to do with the quality of statesmanship of the assembled leaders. In fact, the reason was technical in nature and somewhat political in scope.

The ASEM forum traditionally excludes the United States, the supposed centre of gravity of the global economy as a collective entity in this age of economic globalisation. Shorn of such inevitable jargon, the point to note was that the Beijing summit could not realistically attempt to sketch out a viable plan of action and hope to impose it on the U.S. Because the U.S. was a conspicuous outsider insofar as the ASEM forum was concerned. On the whole, therefore, the summit was more of a brain-storming session on the latest economic storm of worldwide implications.

Ahead of the summit, a French ambassador, answering a question from this correspondent about Washingtons voice at the Beijing summit, remarked that the Europeans could not speak for the U.S. at all. According to the envoy, the Americans knew how to communicate their views to the Chinese hosts of the summit before and during the event.

Unsurprisingly in those circumstances, the U.S., obviously feeling its formal non-presence at the Beijing summit, sought to punctuate its deliberations by announcing a November 15 timeline for an unusual summit. The U.S. called for a summit of established economic powers as also other major and emerging economies, all assembled in the so-called Group of 20. Washingtons ostensible objective was to outline a solution, something that the Beijing summit was not able to do, given its formal political matrix.

It was easy to identify the search for a solution as the political agenda of the G-20 leaders, inclusive of those from the ASEM forum. Not so easy to specify, though, was the actual outline of a solution that could be implemented across diverse economies globally.

Asia and Europe themselves are two independent entities of diverse countries each, despite some post-modern trends reflected in their economic interdependence as continents. Nonetheless, they have often claimed to be civilisation leaders, much to the chagrin of the U.S., a neo-superpower in historical terms.

For the most part of the decades since the Second World War, the U.S. has, of course, set the global agenda in the political and economic domains. More importantly, Washington has almost invariably guided the establishment and management of almost all of todays global institutions, including the International Monetary Fund and the World Bank.

In recognition of this context in Beijing, the grim prospect of a global economic crisis was seen to emanate largely from the wellspring of the U.S.-inspired casino capitalism. This colourful but substantive phrase, a graphic description of the greedy and speculative manipulations of the so-called free markets and liberal national economies, came much into vogue during the Beijing summit. And, this realisation gave Asia an edge over Europe, which is largely an appendage of the U.S., in rushing to the moral high ground and calling for a reality check and a new world economic order. It was, in a sense, easy to romanticise this aspect of multilateral diplomacy as a truly historical nicety but for the potential tragedy that the widening crisis seemed to foreshadow. All the same, this reality infused a larger-than-life meaning to the Beijing summit.

The choice of the venue was made long before the outbreak of this crisis, which the Western pundits never saw coming. Yet, Chinas status as the relatively most resilient major economy as of end-October gave the summit more than just an aura of topicality. Participating alongside Chinese President Hu Jintao and Premier Wen Jiabao, Prime Minister Manmohan Singh added Indias weight to Asias China-led voice. However, the meeting did not, on the whole, turn out to be a frontal and potent counter-attack from the East against the West-driven global economic practices of the free markets. Two reasons should explain this.

First, Washingtons absence from the ASEM forum, like the exclusion of the U.S. from the East Asia Summit, reduced the incentive for a truly substantive counter-attack from the East. Moreover, the presence of European leaders in Beijing precluded the possibility of ASEM turning into an exclusive playground for Asian economic powers.

The Asian economic scene, too, is vastly diffused in its fundamentals. Japan is already an established economic superpower, although it is in a stricken mode now. In recent years, China, India and the Association of Southeast Asian Nations (ASEAN) have also aspired for, and even attained in some cases, niche roles on the global economic scene. However, these Asian economies do not necessarily rise above their respective national interests, which in turn have not always been properly perceived by the leaders concerned. As a result, the Asian economies have not developed the habit of acting in concert. Nor have they perfected the art of competition among themselves. This broad but empirical generalisation still overshadows the growing notions, which do not yet translate into durable signs, of win-win economic partnerships among these Asian powers.

The second reason for the absence of a viable, as different from verbal, counter-attack from the East at this time had to do with the timing of the ASEMs Beijing session. The U.S.-spawned financial and economic crises had spread to Asia only a short time before the Beijing summit, and that too only in some measure.

So, neither China nor India, nor even Japan, Washingtons close political ally, had sufficient time on its hands to prepare a workable post-Breton Woods blueprint of global financial architecture. At the same time, the need for such an architecture, with a greater focus than before on the functional dos and donts for ground-level banks and other financial institutions, looked indisputable on the eve of the Beijing meet.

In the event, the summit, founded essentially on the functional principle of consensus on advocacy issues rather than action-oriented decision making, turned into a dialogue forum, albeit a serious one at that. The tone was set by Hu in his initial remarks.

On the relevance of ASEM, a forum minus the U.S., Hu said: With general political stability and vigorous development of various regional and subregional cooperation mechanisms, Asia has become one of the worlds most dynamic regions in terms of development. [Moreover,] Europe has made further progress [than before] in [that continents] integration and external cooperation, and is playing a greater role in international affairs [than at any earlier time]. Hu outlined a logical follow-up on the basis of this argument: As economic globalisation is gaining momentum, the future of Asia and Europe has been increasingly tied to the future of the whole world, and cooperation between Asia and Europe for win-win progress is our best option.

Shining the spotlight on the present crisis, Hu said: In response to the new requirements of the times, Asia and Europe should make better use of this [ASEM] platform to increase dialogue, expand consensus, enhance trust and deepen cooperation.

At another level, Manmohan Singhs political broadside against the freewheeling tactics of the practitioners of liberal economics in the developed bloc, ungoverned by any truly global oversight, did not go unnoticed. However, Indias own unsettled macro-economic discourse in the public domain did not add lustre to his sermon.

Before travelling to Beijing, Manmohan Singh held extensive talks with Japanese leaders, Prime Minister Taro Aso and others, in Tokyo. A significant aspect of his discussions there covered the burgeoning economic ties between India and Japan, which still remain on different macroeconomic wavelengths despite New Delhis recent moves towards the Western-style architecture, now discredited by Manmohan Singh himself with his reference to casino-style capitalism.

As a result, the Aso-Manmohan Singh summit in Tokyo on October 22 acquired importance for reasons other than economic partnership. A joint declaration on Security Cooperation, dubbed a security pact in amateur language, was signed. The sweeping array of areas of cooperation outlined in the declaration is indicative of a quantum jump in the security links between the two countries. This does not of course denote any kind of military alliance. However, the blueprint of cooperation has been facilitated by the new upswing in the strategic engagement between India and the U.S., Japans steadfast military ally.

On the critical issue of civil nuclear energy cooperation, pacifist Japan remained tight-fisted. Neither leader disclosed any likelihood of Tokyo negotiating an agreement with New Delhi to supply, in a safeguarded fashion, Japanese civil nuclear reactors and dual-use know-how to India. This was in line with the assertion of Japanese spokesman Kazuo Kodama in a telephonic interview to Frontline on the eve of the Aso-Manmohan Singh summit. Kodama had emphasised that there will be no nuclear rush [to India] so far as Japan is concerned. He was responding to a question whether pacifist Japan would stay clear of the new nuclear rush towards India, like the gold rush in a different context, on the part of the U.S., France and Russia at this stage.

Japan has already described its participation in the Nuclear Suppliers Groups recent pro-India consensus as a difficult decision. Unsurprisingly in this context, the latest Aso-Manmohan Singh joint statement became particularly noteworthy for its reaffirmations to work for the creation of a nuclear-weapons-free global order over time. However, as international experts on the issue such as Ivo Daalder and Jan Lodal have indicated recently, the U.S. may need to take the lead in this campaign.

At an overarching political level, the Aso-Manmohan Singh statement was now devoid of the old Japanese leaders earlier proposition that the U.S., Japan, India and Australia could form a forum of Asia-Pacific democracies. It is of strategic importance to the current global situation that this idea has been jettisoned at precisely the time when U.S. presidential candidate John McCains proposal for the formation of an international league of democracies has also been lost on the campaign trail itself.