Nobuyuki Idei: Time for an East Asian Economic Association?
The launch of a business-led regional initiative could pave the way for greater economic integration in east Asia, says Nobuyuki Idei, while strengthening ties with the EU, the US and other trading partners –
There are growing uncertainties all around us since 9/11. Corporate scandals in the US have sent shockwaves through the global business community, and the ailing Japanese economy has yet to see any light at the end of a long tunnel.
But just as today’s problems are at least in part the consequence of actions taken in the past, so it is our duty as responsible citizens of the world to act now and sow the seeds of economic prosperity and political stability for future generations.
Through repeated business trips to the People’s Republic of China, and especially to such cities as Suzhou, Shenzhen, Beijing and Shanghai, I have seen for myself the rapid pace of social and economic change in China. It is demonstrating increased standing as the world’s leading manufacturing base, and has a vast, untapped market with enormous potential for growth.
Despite recent changes in government personnel, China will continue with programmes for economic growth and strengthen its ties to the global economy by fulfilling its World Trade Organization commitments.
In the light of China’s economic surge, I have been advocating in Japanese business circles the concept of “soft alliances”, which are loosely tied corporate relationships designed to promote synergy between two partners in such a way that each partner can complement its relative weaknesses with the other’s strengths.
In the case of Sony, we enjoy several such multilateral relationships with other companies whereby we are simultaneously business partners and head-on competitors.
Not only corporations but also entire countries can enter into such “soft alliances”. If such relationships could be extended to the entire east Asian region – including such countries as Japan, China, Korea and Singapore – this could lay the groundwork for the eventual creation of an East Asian Economic Association.
What steps can we now take to prepare the way for such an association? Aiming too high from the start – for example, trying to establish a regional free trade area comparable to Nafta (the North American Free Trade Agreement) – might derail the process. Agricultural issues in particular already pose significant obstacles to such discussions.
We could instead begin with realistic plans designed to stimulate economic growth within the region. Examples of such plans include an east Asian broadband IT initiative (a kind of IT super-highway connecting member states), plans addressing common energy and environmental issues, and an integrated stockmarket.
Such business-led initiatives could pave the way eventually for greater region-wide economic integration. Naturally, the purpose of such an association would certainly not be the isolation of the Asian nations from their non-Asian trading partners.
On the contrary, the association would seek to encourage economic growth in Asia by strengthening its ties to the EU, the US, and other trading partners.
Japan is in a position to take the lead in such initiatives. Its economic scale and critical role in the global economic community make it ideally suited as a point of interface between Asia, the US and the EU.
Admittedly, Asia lacks an experience equal to that of the Greco-Roman tradition that, via the Roman Empire, forms the basis for a common cultural, historical, and philosophical background in Europe.
Although many Asian nations have been strongly influenced by Chinese culture, there has never been a political or economic unity among the various parts of Asia, such as the Roman Empire and the Holy Roman Empire provided in Europe.
Cultural and historical differences aside, however, Asian nations can still derive many valuable hints and lessons from a study of the modern origins of the EU in the last century.
The idea for such a union originated in the book Paneuropa, written in 1923 by Count Richard Coudenhove-Kalergi (1894-1972, an Austrian diplomat whose mother, interestingly enough, was Japanese). Seventy years later, the Maastricht Treaty was signed, leading to the birth in 1994 of the European Union as a broadening of the European Community .
Is it reasonable to suppose that Asian nations can achieve a similarly successful economic union, when even the Europeans, with their common Greco-Roman cultural tradition, could scarcely unite themselves in 70 years?
Two factors lead one to be optimistic in this respect. One is the fact that Association of South East Asian Nations (Asean) members have already achieved a sort of economic cooperation similar to the “soft alliances” described above – proving that Asian nations are just as capable as European ones of working together for the common good.
The other is the recent history of Japan, which, between 1868 and 1968, transformed itself into a fully industrialized first-world nation with a high standard of living.
In other words, even though Japan began its industrial revolution about 100 years later than Europe’s, it has now at least equalled, if not surpassed, the technological advancement of European countries.
The rapid growth of other Asian countries such as Korea, Singapore and China also testifies to how quickly countries can catch up. Thus, even if east Asia is beginning its quest for unity almost 100 years later than Europe, there is no reason why it cannot catch up in this area as well. Recent developments in information technology can only help to speed up the process.
The World Economic Forum started as a small gathering to discuss European economic issues. Over the past 30 years, it has grown into one of the world’s most renowned economic forums, featuring experts from business, academia, and politics.
Its culturally diverse environment makes it an ideal place to discuss regional issues. Perhaps it can serve as a forum to start the discussion towards creating an open and prosperous East Asian Economic Association.
Nobuyuki Idei
Nobuyuki Idei is chairman and chief executive officer of Sony Corporation.
