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Source: http://www.mfa.go.th/Policy/fm01.htm
Remarks BY
His Excellency Dr. Surin Pitsuwan
Minister of Foreign Affairs of Thailand
At the Asia Pacific Roundtable
Kuala Lumpur, Malaysia
1 June 1998
Mr. Chairman, Excellencies, Distinguished Roundtable Participants,
It is certainly a pleasure to be in Kuala Lumpur again attending this 12th Asia Pacific Roundtable and seeing so many old friends and colleagues. I have lost track of the number of times that I have visited the Malaysian capital over the past year. Not only is KL one of my favourite cities in Asia, but the trip here is quite pleasant. It usually takes me less time to get here than to travel from one part of Bangkok to another!
It is somewhat less of a pleasure to discuss the topic of this first plenary session, namely, the Currency Turmoil in Asia," and the strategic impact of such turmoil. Nonetheless, I believe that discussion and consultation are essential if we are to learn from the lessons of the past in order to avoid the problems of the future.
Excellencies,
Ladies and Gentlemen,
I find it hard to believe that almost one year has passed since the onset of the current economic crisis in Asia. It all goes to show how time flies, even when you are not having fun.
In contemplating about the current economic crisis, I am reminded of the words of the late President John F. Kennedy, who once observed that the Chinese word for "crisis," or weiji, when written in Chinese, is composed of two characters--one represents danger and the other represents opportunity. Indeed, the present crisis offers us both daunting challenges and favourable opportunities. There is, therefore, no alternative for us but to tackle the ensuing dangers head on and to make the most of the opportunities that are presented.
In this regard, I believe we should view the currency crisis as a unique opportunity to rebuild anew our economic and political foundations for the twenty-first century--an opportunity to examine ourh present economic and financial structure, develop new growth strategies, conduct necessary economic and political reforms, and bring our fiscal and monetary systems more in line with the demands of a globalized world. Painful as the process may be, the currency crisis has compelled the countries of Bast Asia to confront and tackle underlying weaknesses in our economic and financial sectors, and this can only bode well for the future.
One strategic impact of the currency crisis, as I can see it, is that it has brought home, with stark reality, the close-knitted interdependence of this globalized world. It is evident by now that the current crisis is not merely an "Asian crisis," as most people initially viewed it, but a matter of common global concern. For in a world where economies are tightly interlinked, where information technology instantaneously brings events occurring in one corner of the earth to another, virtually no country can insulate itself from the impact of crises breaking out elsewhere, no matter how far away they may be.
The so-called "contagion effect" has demonstrated that no nation can consider itself immune from the pervasive influence of the global economy. It reminds me of what an English poet from the 17th Century once said:
No man is an island, entire of itself; every man is a piece of the continent, a part of the main...any man's death diminishes me, because I am involved in mankind...
Therefore, it would be wise for countries to join together at an early stage of an economic outbreak in order to contain the malaise before it spreads to other countries and weakens the system as a whole.
Also of great strategic significance is the currency turmoil's potential impact on ASEAN. Some political observers have already expressed concern about the implications which the crisis might have on the future strength and standing of ASEAN as a regional grouping as well as ASEAN's ability to play a leading role in the international arena. Of particular concern is the fact that the crisis might force ASEAN governments to become so preoccupied with their domestic affairs that ASEAN diplomacy could lose its velocity. Or, quite possible, intra-ASEAN tensions and conflicts could flare up due to various pressures on our weakened financial and political infrastructures. From playing a leading role at the forefront of the region's foreign policy initiatives, ASEAN, it is feared, might be relegated to a position "in the backwoods" of regional diplomatic undertakings. We cannot afford to let that happen to us as a group.
Throughout its thirty-year history, ASEAN has encountered more than its fair share of crises, both large and small, and has always managed to emerge even stronger than before. I have no reason to believe that this time will be any different, although ASEAN cannot be complacent and take this as a given.
In any case, as a direct result of the currency crisis, ASEAN once again stands at a watershed in its history, following crises of different natures in the mid-1970s and early 1980s. Hence, for ASEAN to overcome this latest threat to its viability as an organization, it is imperative for ASEAN to step up to the challenge, rally together, and reach within itself for the strength and resilience which have always been a hallmark of the grouping.
At this crucial juncture, I believe it is essential for ASEAN's advanced member states to coordinate more closely their policies, especially on issues of trade and investment, finance and macro-economic policies, not only among themselves but also with outside regions. At the same time, the new members of ASEAN may find this an opportune moment to reassess their respective processes of economic and political development in the face of the rapid and far-reaching changes in the global arena.
In particular, it is vital for all the members of ASEAN to begin to "look inward" into the very psyche of the organization to determine what factors might serve to undermine our united voice and cause us to lose our diplomatic weight--the structure of our government; the transparency, or lack of it, in our economy; the issue of human rights; the issue of democracy? Indeed, what factors might serve to undermine our very existence and erode our standing as an anchor of stability in the region?
By the term "looking inward," I do not mean, of course, that ASEAN should become an inward-looking organization, focusing only on itself at the exclusion of other countries and groupings. Now, more than ever, it is imperative for ASEAN to reach out and cooperate closely with our friends and partners in other regions of the world.
Political reform in Thailand, reformasi in Indonesia--would that be enough? How about the rest of the ASEAN member states? Can they afford to remain idle, unmoved, defiant against the forces of change sweeping across the region?
The currency crisis could also have a strategic impact in bringing about changes within ASEAN itself. Speaking as a former academic, who earnestly cares about ASEAN and its political future, I wish to pose the question to this academic forum whether the time has come for ASEAN to rethink its decades-old policy of non-interference in the internal affairs of member States. As previously mentioned, events during the past few years have underscored how closely interlinked are the destinies of countries around the world in this era of globalization. If events in one nation inevitably impact upon the affairs of another nation halfway around the globe, how much more immediate and pronounced the impact when it involves the members within ASEAN?
This is to say that ASEAN members perhaps no longer can afford to adopt a non-committal stance and avoid passing judgement on events in a member country, simply on the grounds of "non-interference." To be sure, ASEAN's respect for the sovereignty of fellow members is one reason why the grouping has come this far and enjoyed such longevity. However, if domestic events in one member's territory impact adversely on another member's internal affairs, not to mention regional peace and prosperity, much can be said in favour of ASEAN members playing a more proactive role. Consequently, it is obvious that ASEAN countries have an overriding interest in the internal affairs of its fellow members and may, on occasion, find it necessary to recommend" certain course of action on specific issues that affect us all, directly or indirectly. Or, to be explicit, we may need to make intra-ASEAN relations more dynamic, more engaged, and, yes, more constructive than before.
Another strategic impact of the economic meltdown is on our regional security framework. In response to the crisis, I believe that the ASEAN countries need to enhance their ability to work in tandem to protect and preserve the stability of our region, so that we can avoid the danger of over-reliance on third parties. A security forum like ARF is becoming more crucial in building confidence and transparency as well as in avoidance of misperceiving threats. We need to explore and remove the roots of distrust among us, the causes of internal conflicts and tension in our countries, be they of ethnic, economic, social or political nature.
In discussing the peace and stability of the region, it deserves to be noted that the nature of the security threat in the aftermath of the crisis is likely to change a little bit from the more traditional threats of the past. Rather than the danger of armed conflict or invasion, it can be expected that various transnational problems will come to the fore as the main threats to regional security. These include problems such as international migration; uncontrolled, illegal drugs; transnational crime; and the environment, some of which will be discussed during the next few days of this Roundtable.
Ambassador Nobuo Matsunaga mentioned the unfortunate situation in South Asia in his opening remarks. We, in Southeast Asia--Malaysia, in particular, who served as an initiator of the concept of a Zone of Peace, Freedom and Neutrality (ZOPFAN) and a Southeast Asian Nuclear Weapon-Free Zone (SEANWFZ)--we, in Southeast Asia are particularly concerned about and sensitive to developments in South Asia over the past two weeks. Next month, in the Philippines, ARF will take up and give serious consideration to this threat to our dreams and aspirations concerning SEANWFZ. We are disturbed by such developments at a time when we do not have the resources to spend more on defence matters. These are very disturbing developments indeed.
Excellencies, Ladies and Gentlemen,
Having focused on the strategic implications of the currency turmoil on ASEAN as a grouping, I now wish to turn to the strategic implications of the crisis on the balance of power in the region. In addition to ASEAN, there are a few countries who have a vital role to play in the economic future of Asia and the unravelling of this financial crisis. Of particular significance is the kind of leadership role which will be played by each.
The People's Republic of China, for one, has emerged as a very responsible player in the midst of this economic turmoil, and this has raised China's diplomatic profile to a great extent. Beijing's actions thus far reflect the new-found confidence on the part of China in playing a more active and constructive role in the region. Other powers should welcome this increased assertiveness on the part of China rather than seeing it in any way as a threat to the region. What China needs now is encouragement, not suspicion.
As a major power in the Asia-Pacific, with a booming economy which so far has escaped the effects of the currency crisis, China will be looked upon to play a constructive and responsible role in maintaining economic equilibrium in the region. In this regard, the maintenance of currency stability in China itself becomes a critical factor in ensuring the stability of the other currencies in Asia, particularly those of the countries hardest hit by the crisis. Concern has been expressed that China might be tempted to devalue the yuan in response to the depreciations of the Southeast Asian currencies. Such a move would most certainly aggravate the Asian financial crisis and have a devastating impact on the Southeast Asian economies, not to mention that of Hong Kong. For this reason, the continued reassurances by Chinese leaders that Beijing will not resort to a currency devaluation have been universally welcomed, and China has been deservedly praised for her steady response and restraint in dealing with the crisis.
But China, too, has her limits. We, in Southeast Asia, have been experiencing the myth of Sisyphus, a Greek who had to roll a stone uphill. Each time that he almost reached the top, the stone fell and he had to start all over again. The current economic turmoil began in Thailand and spread to other countries. However, just when our economy was starting to stabilize, crises broke out in Korea and Indonesia and we have to face the same task as Sisyphus.
As the world's second largest economy and the undisputed economic superpower in the region, Japan must undoubtedly play a central role in the resolution of the financial crisis. Since Japan is by far the region's largest importer, exporter, investor and financier, the Japanese economy is like a lifeline for the rest of the region. Therefore, the strength or weakness of the Japanese economy will, to a large extent, determine the economic fortunes of Asia and the world at large.
For this reason, it is vital for Japan to play a leadership role in the crisis commensurate with its economic superpower status. In view of the country's massive economy, Japan has the capacity to serve as the locomotive for economic recovery and sustained growth in the region. A strong and healthy Japanese economy would thus be one of the best remedies for the current financial malaise in Asia. It would provide a much-needed market to absorb exports from the rest of Asia. At the same time, it would enable vital Japanese investment outflows to proceed throughout the region. On the other hand, a Japan experiencing economic difficulties would portend a very dismal future, not only for the countries afflicted by the economic crisis, but for the global economy as a whole.
Hence, one of the most essential antidotes for the region is a prosperous and bustling Japanese economy. Consequently, it is paramount for the region that the Japanese Government do all it can to stimulate the Japanese economy and generate greater domestic demand. The successful stimulation of Japan's economy would then serve as a powerful engine to propel other Asian economies forward, leading to economic recovery in the Asia-Pacific as a whole.
I have to say that, although Japan has done much for the Asian countries during the current crisis, we all expect Japan to do more. This includes solving her own financial crisis, increasing domestic demand, and opening up her markets for our products. Our market in Japan has actually shrunk at a time when it needs to expand. So, we expect Japan to do more, by way of regenerating her economy, opening up her market, and so forth.
Equally important to Asia's economic recovery will be the role of countries geographically outside the region. In order to emerge from this financial crisis, Asia will need to pave its road towards recovery on the basis of export-led growth. With most of Asia entering into a period of recession or slow growth during the next few years, Asian hopes for overseas demand may have to rest on the advanced industrialized nations of the United States, Canada, and the European Union.
However, with most countries seeking to sell and few in a position to buy, difficult times are expected to lie ahead for the global economy in the midst of one of the most competitive environments in world history. Nonetheless, in the face of greater worldwide competition, the principle of free trade should be the predominant guiding light to steer countries through these troubled economic seas. Countries must remain committed to keeping their markets open and must resist any tendencies or pressures towards protectionism. Any such unilateral measures would only provoke retaliatory action that could touch off a chain of events leading to a worldwide recession.
Excellencies, Ladies and Gentlemen,
From my comments this morning, it is apparent that the road for all of us leading into the twenty-first century will not be strewn with roses, but is more likely to be full of thorns. Yet I am confident that, slowly but surely, we will succeed in seeing this crisis through.
Grim as our task may be, I am convinced there is no place for prophecies of doom conjured up by some analysts. While the current crisis is unmistakably severe, many of the economic fundamentals which have brought Asia this far remain strong and firmly in place.
Some have taken to belittling the so-called "Asian miracle" although this was a phrase coined by others, and not an accolade we bestowed upon ourselves. 0 Actually, as my Prime Minister stated in Hong Kong just two weeks ago, "We do not believe in miracles, just plain hard work." Ladies and gentlemen, the miracle is no more. Perhaps it never existed. But what does exist and remain firmly entrenched is the Asian ethos of hard work, innovation and family values, in addition to a traditionally high savings rate and solid economic fundamentals. Such factors should serve as a valuable reservoir for the Asian nations to draw upon in riding out the current crisis.
For companies that have been forced into bankruptcy and individuals who have lost their jobs, it would seem preposterous to describe Asia's economic crisis as a "blessing in disguise." Yet years from now, after we have weathered this economic storm, I am convinced that we will look back upon present events as an important turning point in our rich history--a juncture in which the Asian countries seized the opportunity to make the necessary adjustments, which allowed them -- all of us -- to move into the twenty-first century on a more solid footing than ever before.
Thank you very much.
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