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Wednesday 19 Dec 2018 | 05:48 | SYDNEY
Wednesday 19 Dec 2018 | 05:48 | SYDNEY

Lifting Asia's economic voice



27 May 2013 11:10

Mike Callaghan is Director of the Lowy Institute's G20 Studies Centre.

One of Australia's objectives when it chairs the G20 in 2014 should be to lift the voice of Asia in global economic forums.

A step in this direction would be for Australia to coordinate a joint statement by the six Asian members of the G20 (Australia, China, India, Indonesia, Japan and Korea) in support of a major point of focus for the G20. Such an issue could be the importance of resisting protectionism in all its forms and maintaining the multilateral approach to trade liberalisation.

It would be even more powerful if an 'Asian' statement came from not only the official sector, but also the business community. Australia's B20 leadership group should work for a joint 'Asian business statement' on G20 priorities.

The global centre of economic activity is increasingly shifting towards Asia. This was highlighted in the Australia in the Asian Century White Paper. But the White Paper did not mention that Asia's voice in the global economy is not commensurate with its economic weight. Many others have pointed to the lack of an 'Asian voice', particularly in the G20.

This was highlighted, for example, at the World Economic Forum on East Asia in the midst of the crisis, when the chairman of Barclay's Bank, Marcus Aigius, called on Asia to have a voice on the international stage commensurate to its new economic clout. At the same forum, the former Indian Minister for External Affairs and Minister for Finance Yashwant Sinha said 'If we are providing the bulk of the incremental growth globally, we Asian nations have a vested and immediate interest in making sure that the global institutions respond to the global crisis as they should.'

Much attention has focused on the BRICS, the group covering Brazil, Russia, India, China and South Africa. At their summit this year, BRICS leaders announced a new development bank. Dani Rodrik has pointed out, however, that what the world needs is not another development bank, but leadership on today's great global issues.

The same applies to Asia; it needs to exercise greater leadership and influence on global issues. And Asia has more reason to do so than the BRICS, being collectively larger and more integrated.

The BRICS share of global GDP in 2011 was 26%. The share of ASEAN-3 (ASEAN plus China, Japan and Korea) was also 26% and ASEAN-6 (ASEAN-3 plus Australia, India and New Zealand) was 33%. Moreover, the Asian economies are far more integrated. Over 50% of the total trade of Asia is conducted between Asian economies.

There have been calls for the Asian members of the G20 to caucus on areas of common interest. Henning and Khan noted: 'It is obvious that, given the size of Asia, a common position among the Asian members on major systemic issues would carry considerable weight in the discussion of the G20'.

But Chen Dongxiao pointed out earlier this year that the collective influence of the Asian members in the G20's agenda setting and overall performance remains limited. 'Thanks to the extremely complicated geoeconomic and geopolitical reasons, the Asian G20 members are in want of a powerful mechanism to take effective and concerted policy coordination in respect of setting agenda of the global economic governance'.

One tangible step Australia could take to help lift the collective voice of Asia is to coordinate a joint 'Asian' statement on at least one systemic issue of importance for the G20. Trade could be that issue.

The Australia in the Asian Century White Paper highlighted how the economies in Asia were major beneficiaries of an open global trading regime. The maintenance and expansion of such a regime should be an area of common interest. Yet the Doha Round is all but dead, there is growing concern that the WTO ministerial meeting in December 2013 will fail to move forward on any issue, the focus is on discriminatory regional trading arrangements, and new protectionist measures by G20 members are on the rise.

Against this background, it would be an opportune time for the G20's Asian members to release a joint statement emphasising the need to resist and roll back protectionist measures along with the importance of the maintaining the multilateral trading system and the role of the WTO.

The mere existence of a joint statement by Asian economies would be a major step. It would be that much more powerful if the statement came not only from governments but also business interests. The Australian Government and the Australian B20 leadership group should take up this challenge.

Photo by Flickr user caledomac.

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