Speech by George Yeo, Singapore Minister for Foreign Affairs, at the CII Partnership Summit in Bangalore on 18 Jan 07: Does the 21st Century belong to Asia

Does the 21st Century belong to Asia

1. I get worried every time a question is posed in this way. It is hubris. It was less than 10 years ago when a spate of articles appeared in the US asking whether Washington as sole hyperpower should be thinking of exercising influence in the world the way Rome did two thousand years ago. That thinking underlay the neo-conservative view of the world and led to grief. We must never over-rate ourselves.

2. There is no doubt that Asia is resurging. With over half the world's population, this resurgence will transform the world in this century. For most of history, China was the world's biggest economy and India the second because of the large number of people. It is likely that they will resume these positions in the coming decades. With four times the population of the US, China only needs to achieve a per capita income one quarter that of the US for its economy to be equal in size. Such a per capita income would still be less than that of Taiwan today. After 2030, India will have even more people than China.

3. But nothing is predetermined in human history and many things can go wrong for Asia. In past periods, every major shift of power in the world was accompanied by wars and social upheavals. The rise of Europe five hundred years ago began a long era of conquest and colonization which effects we are still feeling today. The shift of power across the Atlantic to the US only became clear after two world wars and one great depression. The first challenge to the West in Asia by Japan was in the end snuffed out by two atomic bombs after a long war which killed millions of people on the Asian mainland. When we talk lightly about a shift of power to Asia, let us never forget the lessons of the past.

4. The big challenge for Asia is therefore one of war and peace. Last year, the US Department of Defense in its Quadrennial Defense Review last year publicly identified China as the only country that could challenge the US in a comprehensive way. The wise managment of Sino-US relations is therefore of the greatest importance to all of us. If that relationship is mismanaged, all bets are off. India is increasingly figuring in that equation whether it wants to or not. As an American explained to me, the reason the US Congress passed the nuclear cooperation agreement with India recently was not out of love of India but out of fear of China. However, it is not in India's interest to see the US and China come to blows. India, like Singapore and ASEAN, prefers a Pacific that is peaceful. There is no danger that the US and China will become so close that our own interests are short-changed.

5. Between India and China, bilateral relations have entered a new era of cooperation. While it is only to be expected that each will eye the other warily, the general trend is towards greater engagement. As PM Manmohan Singh said, each is too big to be contained by the other and the world is large enough to accommodate the aspirations of both countries. Bilateral trade is growing rapidly with China becoming India's biggest trading partner.

6. Building a regional architecture which enables problems to be managed and kept within bounds is therefore of the highest priority. APEC, the Asia-Pacific Economic Cooperation forum, is the most important regional organisation holding the two sides of the Pacific together. At the APEC Summit in Hanoi recently, the Leaders agreed to consider the idea of a Free Trade Area of the Asia-Pacific. Keeping minds focussed on economic cooperation instead of political adventure is helpful in itself.

7. The East Asia Summit (EAS) is another important initiative. ASEAN included India, Australia and New Zealand in the EAS to ensure that the region stays outward-oriented and inclusive. It is an important forum for India and China to engage each other taking into account the interests of the smaller countries in the region. All of us in the EAS share common interests in greater economic integration, better connectivity, energy security, environmental protection and the safety of our air and sea lanes. One long term project being studied is the feasibility of a Free Trade Area embracing all the EAS countries. This, together with the proposal for a Free Trade Area of the Asia-Pacific, will help ensure that the global trading system stays open under the WTO. PM Manmohan Singh's call for an Asian Economic Community is worth pursueing as a long-term objective.

8. In all these arrangements, ASEAN plays a major role, not because we are powerful, but because we are not. Because ASEAN is completely non-threatening, we can deal with all the major powers in a fair and equitable way. It is not in the interest of any of the great powers to see ASEAN balkanized. If by the construction of a good regional architecture we are able to secure another generation of peace for ourselves, the future for Asia will indeed be bright.

9. Within Asia itself, we must ensure that regional disputes do not get out of hand. Asia is too big and diverse ever to become a bloc. In Northeast Asia, the relationship between China and Japan is improving. By making his first official visit to China, Japanese PM Abe signalled his intentions clearly. It is not in China's interest either to have bad relations with Japan.

10. In Southeast Asia, the ASEAN countries are coming closer together. Just last week in the Philippines, the Leaders accepted the recommendations of an Eminent Persons Group as the basis for the drafting of an ASEAN Charter which will be the Constitution for an integrated ASEAN.

11. In South Asia, the key to peace is finding a creative solution to the problem of Kashmir. The recent proposal by President Musharraf on Kashmir and PM Manmohan Singh's positive response to it give us reason to be cautiously optimistic. Kashmir has long been a brake on the development of the Sub-Continent. It is still a long road to an eventual settlement but just a more constructive attitude on both sides alone will create a better environment for trade and investment. India has a chance now to achieve double-digit growth. India's economic development should in the end pull the whole of South Asia along. With India's growing links to ASEAN and Northeast Asia, all this will lead to a more organically integrated Asia.

12. Rapid development in Asia has pushed up the prices of oil and gas resulting in windfall gains to the hydrocarbon-rich countries of West and Central Asia. The countries around the Gulf and the Caspian are all benefiting greatly from the energy boom. Most of Asia is therefore on the move. So long as the larger peace is maintained, although ups and downs there will be, we are likely to see much faster growth on average than the rest of the world.

13. Rapid growth is however creating its new problems. With globalisation, income levels are stretching out in all countries. In countries growing rapidly, the rich has become very rich while some among the poor remain desperately poor. Unless special efforts are made to ameliorate the divisive effects, social tensions will increase in many countries. Both the Governments in Delhi and Beijing are very worried about this. Farmers committing suicide are only the tip of an iceberg which can knock our ship off-course. If we look back at the industrial revolution in Europe, the social inequities created a fierce reaction expressed initially in purely destructive beheaviour and later as political and ideological movements - militant trade unionism, socialism, communism, racism, fascism and protectionism. We must never believe that we are past the age of ideology or that this new age of globalisation will be a bed of roses. There is no end to history. Sooner or later, a new cycle will be upon us. The emergence of Jihadi extremism which India and other countries have suffered terribly from is but one example of a reaction that will grow stronger in the coming years. It is therefore imperative for governments in Asia to diffuse the social tensions brought about by rapid growth.

14. Education is key. While the middle classes are always able to fend for themselves when forced to, for those at the bottom of the social ladder, education is the only way for them to climb out of the hole. We need massive investment in basic education, healthcare and other social amenities. Unless this is done, the rapid urbanisation taking place all over Asia will create sprawling slums. These slums will become hotbeds for social unrest, eventually spawning ideas and ideologies antithetical to further growth and development.

15. There is nothing new under the sun. A community which is unable to pull along those members who are less successful will eventually fall apart. Some countries will maintain solidarity better than others. They will make rapid progress. Others will fumble and become mired in endless domestic political squabbles. They will be left behind. If we are not careful, their problems will infect us through refugees, terrorism, environmental degradation and the spread of diseases. Take Myanmar as an example. The reason why we cannot ignore what is happening in that country is because a breadown of society there will eventually affect all the surrounding coutries especially China, India, Bangladesh and ASEAN.

16. 21st Century Asia will not be homogeneous. It will remain diverse with bright spots and not-so-bright ones. There will be competition and cooperation at the same time. The different economies will become increasingly inter-dependent and inseparable from the global system. Capital and talent will flow freely to where they are most welcome. Good ideas will be quickly copied and improved upon. Cities will try to leapfrog one another. Out of all this, a new Asian maritime civilization will evolve embracing all the coastal communities from Japan down the China coast through Southeast Asia to South and West Asia. In some ways, it will be like the world of the late 19th and early 20th Centuries before protectionist and ideological walls were erected. Such an Asia will welcome the friendship and participation of Americans, Europeans and others.