Keeping Asia to the forefront
Davos, Switzerland Before answering questions after a dinner at the World Economic Forum here on Friday night, Tung Chee-hwa apologised for any shortcomings on his part by noting that it was six in the morning for him. In the event the Chief Executive had his guests in the palm of his hand, but his remark about the time difference was appropriate to something which has become increasingly apparent as this annual gathering of businessmen, politicians and economists got into its stride amid the heavy Alpine snows.
Three years ago, Asia was everybody's favourite. Last year it was everybody's scoundrel. Now you are going to find that the first mood will swing back. That was the conclusion of a study carried out for the forum. The mood among the delegates and speakers here was somewhat different, however.
It wasn't that anybody underestimates what is being done in Thailand and South Korea, or the way that the government market intervention in Hong Kong has achieved its immediate aim. Rather, the general attitude of delegates seemed to be that the region should go away, sort itself out and then come back to the party. Nobody imagines there is a quick fix for the region's problems, and the long, grinding process under way from Jakarta to Seoul is not one which commands instant attention in a world of sound bites.
At the same time, everybody is fed up with the lack of meaningful movement from Japan. As Larry Summers, the United States Treasury Under-Secretary, said tartly when confronted with yet another pledge from Japan to get its economy moving, it would be a good idea to wait and see if this one was finally going to have the promised effect.
Meanwhile the US and the countries which banded together in Euroland at the beginning of the year power ahead, providing an ever sharper contrast with Asia. It is as if America has reached such a level of self-confidence that it hardly feels the need to do any more than note the troubles in our region before refocusing attention on the Dow and the latest buoyant statistics from Washington. Remember when people spoke of the next hundred years as the Asian century; now Business Week's cover story reckons that it will be the Atlantic century.
Even if everybody agrees the world economy should fly on three engines of the US, Europe, and Asia, two seem quite enough for the time being, at least so far as the Atlantic duo is concerned.
One great risk of the two-speed world economy which has developed over the past 18 months is that, to adapt Mr Tung's remark, we may find ourselves living in different time zones, with the cycles of growth and stagnation getting out of kilter across the globe. That could buttress protectionist pressures as Asian economies seek to shield themselves while the administration in Washington plays increasingly hard ball as its trade deficit soars still further under the double impact of cheap imports from East Asia and falling demand for its capital goods from economies that already have quite enough factories left over from the boom years.
Making sure that the global economy remains global will be one of the major challenges of this last year of the century, and Asia has to make sure that its current woes do not lead to it being relegated to the sidelines. That is as much a political as an economic task, and raises a question which the plethora of regional organisations has done nothing to answer. Who speaks for Asia? In good times, the fact that nobody has that role to play may not have mattered. In adversity, however, the vacuum is all too evident.