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Speech by Mr. Pranab Mukherjee, Hon’ble
External Affairs Minister, Government of India at the High-Level
Conference on “Asian Economic Integration: Towards an Asian Economic
Community”
Dr. Arjun Sengupta, When we talk of Asian economic integration and its potential, we often hear how the 21st century is destined to be the Asian century. A peep into Asian history will show that this is not as revolutionary a state of affairs as is sometimes presumed. The Asian continent was the centre of gravity of the world economy for much of the previous millennium. Various studies show that, in 1000 AD, Asia (excluding Japan) accounted for more than two-thirds of world GDP based on the strengths of the Chinese and Indian civilizations. Indeed, China and India were world leaders in terms of technological and economic development during most of the period from 500AD to 1500AD. Both countries constituted significant political systems and sophisticated economies, bolstered by well-developed industries, overseas trade and important advances in science and mathematics that led to some of the most important inventions of the time. Because of rising incomes in Western Europe, Asia’s share by 1820 AD had come down but was still a substantial 56 per cent. It was only during the period 1820 to 1950, due to reasons that are well known to all of you, that Asian incomes stagnated and brought Asia’s share in world GDP down to only about 20 per cent.
This situation underwent a change over the second half
of the last century as Asia sought to retrieve lost ground. Indeed, the
economic progress achieved by Asia in the fifty years since the end of the
Second World War has been the fastest in human history. The Japanese
example of rapid growth in the 1960s and 1970s was followed in rapid
succession by the success stories of the Asian Tigers and 7% annual growth
became a routine affair in East Asia. China has achieved an average growth
rate of about 9% per year since 1980. In recent years, riding on the back
of important measures of economic reform and liberalization, the Indian
economy has achieved an average annual growth rate of 6% over the 1980s
and 1990s and is currently growing at about 9% annually.
Friends, if we look at individual economic performance,
practically all Asian countries can point to a proud record. If at all
there are lacunae in our record of economic performance, they are perhaps
in the area of regional economic integration. Asian history suggests that
there was vibrant trade, economic and cultural exchange between Asian
countries in pre-colonial times. There is no reason why this experience
cannot be replicated. The recent past has witnessed a series of attempts
in precisely this direction. This is manifested in the setting up of Free
Trade Areas like the ASEAN Free Trade Area (AFTA) and the SAARC Free Trade
Area (SAFTA). In addition, China, Japan, India and South Korea are working
with ASEAN on comprehensive economic cooperation pacts, covering free
trade agreements to be implemented in the coming decade. There is a
growing realization that we need an overarching framework for these
important initiatives that help the countries of the region exploit the
synergies between them for mutual advantage. Hence, proposals for a
pan-Asian economic grouping such as that of an Asian Economic Community
have begun to be discussed.
The dynamics of globalization and the growing economic
potential of Asia justify the resurrection of that vision of Pan-Asian
regionalism. Driven by this vision, India has been striving to strengthen
relations with its Asian partners who are gathered under the umbrella of
the East Asian Summit. We believe that such cooperation is economically
logical and will help make this century the century of Asia. It was in
this context, and with this vision of an Asian century that our Government
unveiled the "Look East" policy in 1991, which is now a vital part of
India's foreign policy.
“Such a community would release enormous creative
energies of our people. One cannot but be captivated by the vision of an
integrated market, spanning the distance from the Himalayas to the Pacific
Ocean, linked by efficient road, rail, air and shipping services. This
community of nations would constitute an "arc of advantage" across which
there would be large scale movement of people, capital, ideas and
creativity. Such a community would be roughly the size of the European
Union in terms of income, and bigger than NAFTA in terms of trade. It
would account for half the world's population and it would hold foreign
exchange reserves exceeding those of the EU and NAFTA put together”.
Unquote.
Studies by RIS and other institutions show that
economic integration within the East Asian Community has the potential to
generate billions of dollars of new output and thus serve as an engine of
growth for the continent and the world economy. Monetary and financial
cooperation in Asia, designed to mobilize the huge foreign exchange
reserves of Asian countries for development of regional infrastructure,
could have the potential of creating hundreds of billions of dollars of
additional output while helping to overcome the infrastructural
constraints for Asian development. |
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