India-Japan Economic Complementarities for Greater...

NEW ASIA MONITOR January 2007 1

Vol. 4 No. 1 January 2007

A Q u a r t e r l y f r o m R I S

Feature ArticleJapan and India are civilisational neighboursand our common heritage of Buddhism

is our oldest bond. In modern times, Tagoreand Okakura Tenshin built new bridges ofunderstanding between our two great Asiannations. The modernisation of Japan basedon advances in science and technology sincethe Meiji Restoration and the energy andspirit with which it rose after the SecondWorld War had a deep impact on our firstPrime Minister Jawaharlal Nehru. JawaharlalNehru wanted India to develop close tieswith Japan and learn from its experiences.

Indian economy in the past fifteen yearshas grown at an average growth rate of oversix per cent per annum and recently it hasgained further momentum and the growthrate has accelerated to over eight per cent perannum. India’s investment rate is now thirtyper cent of our GDP. As a result of wide-ranging economic reforms initiated in the early1990s, India’s economy has acquired theresilience to accept the challenge andopportunity provided by economicglobalisation and the emergence of a multi-polar world.

As an open society and an openeconomy, India is on the move on a sustainedpath of high growth. The success of our effortto transform India within the framework ofa democratic polity is vital to peace andprogress in Asia and the world. Never beforein human history have over a billion peopletried to banish poverty and modernise theirsociety and economy within the frameworkof a plural functioning democracy.

We have developed a new model forservice-led and technology-driven integrationwith the global economy. Today, India hasemerged as an important player in knowledge-based sectors like information technology,biotechnology and pharmaceuticals. Massiveinvestments are being made in the expansionand modernization of physical and socialinfrastructure consisting of roads, railways,telecommunications, sea and airports. Thesedevelopments and the changed internationalscenario created the foundation for our two

India-Japan Economic Complementaritiesfor Greater Significance for Asia

Dr. Manmohan Singh, Hon’ble Prime Minister of India

countries to rapidly develop closer ties.Therefore, this is the right time to build astrong contemporary relationship involvingstrategic and global partnership that will havea great significance for Asia and for the worldas a whole.

We are two major Asian countries whoshare the belief that both India and Japanmust play their rightful and commensuraterole in the emerging international order.Strong ties between India and Japan will bea major factor in building an open andinclusive Asia and in enhancing peace andstability in the Asian region and beyond.

Economic ties must be the bedrock ofour relationship and a strong push is requiredin this area. Our trade and investment tiesare well below potential. To exploit the fullpotential of our economic cooperation, weneed strong efforts by our two governments,business and industry. In this regard, we canbuild the partnership in the knowledgeeconomy. The structure of our economies, thebalance of our comparative advantages and theprofile of our populations are compelling reasonsfor this. In the field of science and technology,we need to accelerate the pace of cooperationin the growth sectors of the future such as nano-technology, bio-technology, life sciences andinformation and communication technologies.We must exploit synergies in the developmentof Indian software and Japanese hardwareindustries.

Energy security is the core area ofmutual interest. Our region as a whole needsthe assurance of the security of energysupplies, and the efficient functioning ofenergy markets. Like Japan, India sees nuclearpower as a viable and clean energy source tomeet its growing energy requirements. Weseek Japan’s support in helping put in placeinnovative and forward-looking approachesof the international community to make thispossible. We have agreed to establish a highlevel Energy Dialogue but such fora must

be established in many more areas, not leastof all between our trade and industry.

I am very pleased that India and Japanare working together to revitalize and reformthe United Nations, and the U.N. SecurityCouncil, making them more relevant to ourtimes. Both of us have a vital stake in theenhanced effectiveness of the UnitedNations and its various organs. To that end,we must intensify our cooperation for anorderly and equitable management of theinterdependence of nations in an increasinglyglobalised world we live in.

As the largest and most developeddemocracies of Asia, we have a mutual stakein each other’s progress and prosperity. Weare determined to provide an investmentfriendly economic environment in India. Iinvite Japanese companies to expand theirpresence in India. Prime Minister Abe and Iwill launch negotiations that will lead to aComprehensive Economic PartnershipAgreement to encourage greater flows oftrade, investment and technology betweenour two countries. Our partnership has thepotential to create an “arc of advantage andprosperity” across Asia, laying the foundationfor the creation of an Asian EconomicCommunity.

The year 2007 is the India-JapanFriendship Year and the year of India-JapanTourism Exchange. We also hope tosubstantially increase air connectivitybetween our two countries. I invite youngand old Japanese to visit India and see forthemselves the many splendours of ancientand modern India.

The idea of a new partnership betweenJapan and India has found its momenttoday. However, any partnership of mindsinvolves greater people-to-people contacts.I come here to give concrete shape to theidea so that future generations will be ableto thank us for the part we are trying to playin making the 21st century an Asian century.(Excerpted from the PM’s address delivered to JointSession of the DIET, Tokyo, 14 December 2006).(The full speech is available at http://pmindia.nic.in/speeches.htm)

2 NEW ASIA MONITOR January 2007

According to the JointDeclaration signed duringChinese President Hu Jintao’svisit to India in November, bothIndia and China, the two biggestdeveloping countries in the worldagreed that their relationship is ofglobal and strategic significance.Both countries hold the view thatthere exist bright prospects fortheir common development, thatthey are not rivals or competitorsbut are partners for mutualbenefit. They agreed that there isenough space for them to growtogether, achieve a higher scale ofdevelopment, and play theirrespective roles in the region andbeyond, while remaining sensitiveto each other’s concerns andaspirations. As two majorcountries in the emerging multi-polar global order, thesimultaneous development ofIndia and China will have apositive influence on the futureinternational system.

Both sides are committed tomake the positive developmentand diversification of bilateralrelations in recent years anirreversible trend. They alsoagreed to hold regular Summit-level meetings, in each other’scountry and in multilateral forums.They agreed that high-levelexchanges between Governments,Parliaments and political partiesplay an important role inexpanding overall bilateralcooperation. They agreed thatChina should open a newConsulate General in Kolkata,while India should open a newone in Guangzhou. Further, inthe Declaration, China and Indiaagreed to endeavour to raise theannual volume of their bilateraltrade to 40 billion US dollars by2010.

Both India and China alsoagreed to strengthen mutuallybeneficial cooperation in the areaof information and communication

technology, through closer policydialogue and enhancedcollaboration among theirenterprises, including in thirdcountries, according to thedeclaration. They agreed to set upan expert-level mechanism todiscuss interaction andcooperation on the provision offlood season hydrological data,emergency management andother issues regarding trans-border rivers.

They consented to cooperatepositively view each other’sparticipation in Asian inter-regional, regional and sub-regional cooperation process,including in the progress towardsthe East Asian Community. Inthis context, the two sides agreedto cooperate closely in theforthcoming East Asia Summit.( Excerpted from the PIB Press Release, 21

November 2006).

© PIB Press Release.

The Petroleum Minister, MrMurli Deora, said that India andChina should jointly bid toacquire overseas oil and gas assetsas both the countries are bigimporters of oil and they shouldboth bid together to save money.He further said that jointparticipation would also help toreduce acquisition costs, as thereare cases where we have lostmoney, but where we haveworked together, we savedmoney.

Recently, ONGC VideshLtd (OVL) and a unit of China’sSinopec International PetroleumExploration and ProductionCorp have jointly acquiredOmimex de Colombia Ltd. OVLand China National PetroleumCorp also hold stakes in Sudan’sGreater Nile Oil Project.

On the domestic front, MrDeora said that his Ministry hasbeen working towards formulatinga suitable gas pipeline policy and

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NEWSIndia and China Seek Closer Economic

Cooperation

India, China Must Jointly Bid for

Oil, Gas Assets

laying down guidelines for gaspricing. For that discussions aregoing on for a vibrant policy,which would help both theconsumers and producers.According to industry grapevine,a high-level panel constituted bythe Ministry to suggest guidelinesfor approving gas price/formulaunder production sharingcontract has suggested that all gassale will have to be done throughcompetitive bidding route, whichwould be subject to review everyfive years.

In circumstances where pricedetermination was not possiblethrough competitive biddingroute, valuation would be doneby the Government or DirectorateGeneral of Hydrocarbons basedon the most recent pricedetermine competitively andindexed to the current levels.(Excerpted from the Hindu Business Line,22 November 2006).

© Hindu Business Line.

India, China to

Cooperate in

Hydrocarbons

SectorLooking forward to the first-evermeeting of Oil Ministers of fivemajor oil consuming nations thatheld in Beijing, Indian PetroleumMinister Murli Deora said thatIndia is ready to cooperate withChina to further explore thepossibilities for joint bidding andexploration for hydrocarbons inthird world countries to fuel theirhigh economic growth and ensureenergy security.

Mr. Deora was also confidentabout India-China cooperation inthe oil and gas sector and revealedthat our recent successes in jointbidding and exploration incountries like Syria, Sudan,Columbia and Nigeria hasencouraged us to engage inmutually beneficial tie-ups.

He was of the opinion that ifboth India and China, being themajor oil importing countries, cancooperate and bid together andthereby avoid a price war for oilassets in third world countrieswould definitely save the foreignexchange of the respective countries.

He also noted that in theJoint Declaration that signedbetween India and China, bothsides have already agreed tocooperate in the field of oil andnatural gas and encouragedcollaboration between theirenterprises, including throughjoint exploration anddevelopment of hydrocarbonresources in third countries. Now,the two sides are exploring newavenues for mutually beneficialcooperation so as to acquirehydrocarbon assets in Africa,Central Asia and Latin America,Deora said. The modalities forbilateral cooperation in thehydrocarbons sector will bediscussed during Deora’s meetingwith the Chairman of the NationalDevelopment Reform Commission(NDRC) Ma Kai, sources said.(Excerpted from the Financial Express, 15December 2006).

© Financial Express.

According to the official Xinhuanews agency, China is consideringthe possibility of establishing afree trade area with India. AssistantCommerce Minister Fu Ziyingsaid that we have to followeconomic globalization trendsand push for the liberalizationand facilitation of trade. If it wereto become a reality, a Sino-Indianfree-trade area would cover 2.4billion people, or more than onethird of mankind.

China is currently holdingtalks with Singapore, Australia,New Zealand and Pakistan aswel l as the 10-memberAssociation of Southeast AsianNations (ASEAN) on theestablishment of free tradeareas.Though the trade betweenthe two Asian giants, both amongthe world’s fastest growingeconomies, has expanded quicklyin recent years.(Excerpted from The Daily Star, 7November 2006).

© The Daily Star.

China Eyes FTA

with India


In a two-day annual ministerialmeeting on transport, organizedby the UN-ESCAP, eighteenAsian nations signed an inter-governmental agreement onestablishing the trans-Asia railway(TAR) network aims to promotetrade and balanced developmentin the world’s fastest-growingcontinent.

According to the UN-ESCAP Executive Secretary, KimHak-Su, the 81,000-kilometrenetwork, first mooted by the UNback in 1960, is also dubbed the“Iron Silk Road” after the ancienttrade route. It would link capitals,ports and industrial hubs across28 Asian countries all the way toEurope. He also told thesignatories that the railwaynetwork will ease internationaltrade and create “the conditionsfor shared prosperity,” and theTAR would “link the hinterlandareas in the deep interior of theAsian continent with Asia’sbustling maritime cities andEuropean markets.” As the twelveof the world’s thirty landlockedcountries are in Asia.

The TAR network wouldconnect trans-Asian railway

networks with Russia andMongolia in the North,Malaysia in the South, SouthKorea in the East and Turkey inthe West.

Earlier in Busan, Kim Hak-Su told the meeting in Republicof Korea’s Southern port city ofBusan, that “We are here becausewe dare to dream – of revitalizingthe spirit of enterprise thatsymbolizes the ancient Silk Road.”He also stated that our work willconstitute policy decisions forbuilding interlinked highwaysand railways for 21st centuryAsia.

He noted that decisions madeearlier could transform remoteparts of the region intointerconnected hubs ofeconomic vitality and socialprogress. In that context, weneed to deal with a range ofinfrastructure and institutionalbarriers that blunt thecompetitive edge of exports andincrease the costs of imports, hesaid.(Excerpted from the UN News Services andFinancial Express, 11 November 2006).

© www. un.org.


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NEWSAsia Moves Closer to ‘Iron Silk

Road’ Railway Network

Prime Minister of New Zealand,Helen Clark, in her speech on theissue of peace, security andprosperity in the Asian region, saidthat within the next twenty totwenty five years China wouldbecome the world’s largesteconomy, overtaking that of the US,and India, on current projections,would not be far behind. The regioncomprises around 60 per cent of theworld’s population. Further,countries within the regionincluding New Zealand arerepositioning themselves in responseto these changes.

Miss Clark said India waslooking east and many countrieswere carefully assessing thepotential of their relationship withChina. ASEAN was seeking to

Asia Repositions as China, India

Become Economic Powersaccelerate the slow pace of its owneconomic integration, and waspursuing stronger economic andpolitical relationships with othercountries in the region especiallyChina, Japan, and India.

Miss Clark was of the opinionthat the establishment of the EastAsia Summit was a “significant”development for the region withits objectives to promote political,security, and economiccooperation region wide. There isno need to underestimate the valueof a regular dialogue which bringstogether the leaders of majorplayers like China, India, and Japanin the same room.

(Excerpted from the www.stuff.co.nz, 11November 2006).

© www.stuff.co.nz.

Asian Development Bank haspredicted that the dollar was likelyto decline further and called forEast Asian countries to make surethat their currencies appreciate inunison - and do not start swingingsharply in value relative to oneanother.

The remarks by the official,Masahiro Kawai, represent thefirst time that the multilateral bank- or for that matter, any prominentAsian monetary institution - hasurged collective action by EastAsian countries to manage thecurrent slide of the dollar.

The East Asian monetaryauthorities together hold morethan $3 trillion in foreignexchange reserves, most of it indollars, and their large purchases

of dollars this year have played acrucial role in stemming thedollar’s decline until now.

Kawai said that some U.S.dollar depreciation would benecessary and collective jointappreciation of the East Asiancountries could be needed tomanage the decline as it’s veryimportant for the East Asiancurrencies to appreciatecollectively against the U.S. dollar.

Kawai also said that Chinahad accumulated excessiveforeign exchange reserves byintervening in markets to holddown the value of its currency,known as the yuan or renminbi.(Excerpted from the International HeraldTribune, 7 December 2006).

© International Herald Tribune.

Asian Development Bank

Urges Unity on Dollar’s Fall

Prime Minister of India, Dr.Manmohan Singh during anexclusive interview with theYomiuri Shimbun said that Indiawas “very keen that both Japan andIndia should accelerate the tempo”of the realization of an EPAbetween the two countries thatwould center on a free tradeagreement. He indicated that tradeand investment between thecountries were disproportionatelysmall given the size of the Japaneseeconomy and India’s potential forgrowth. As economic integrationin Asia picks up speed, cooperationhas become vital to Japan, in thatit wishes to emulate China, whichcontinues to make its economicpresence felt in the region.

While confident of hiscountry’s growth potential, thePrime Minister said hisGovernment would address a Five-Year Economic Plan starting April2007 to ensure an annual growthrate of 9 per cent to 10 per cent. Atthe same time, the Prime Ministerwas more concerned about the lowvolume of Japanese-Indian trade.

India has therefore sought thediversification of trade with Japanto enhance the “complement-

arities” between the twocountries by boosting Japan’simport of India’s knowledge-intensive exports from its fast-growing information technologyand pharmaceutical sectors.According to Mr Singh, Japan’strade with India wassubstantially smaller than its tradewith South Korea or China,stressing the need to acceleratethe pace of expanding both tradeand investment between Japanand India.

India has high growthpotential in both the IT andInternet industries. According tothe report issued on a jointJapanese-Indian EPA studymeeting, Tokyo’s efforts toincrease the number of orders forIndian software would help itstrengthen its own internationalcompetitiveness, an example ofSingh’s “complementarities.”India, for its part, hopes to seeJapan not only increase importsof its software, but also allowIndian IT technicians to work inJapan. (Excerpted from the Daily Yomiuri Online,6 December 2006).

© Daily Yomiuri Online.

India Keen to Accelerate the EPA

with Japan


At an internationalsymposium titled ‘RevivingBuddhist Cultural Links’, inSingapore, an ambitious $150million project was unfolded torestore the past glory of theIndia’s ancient NalandaUniversity. In this endeavour,the joint venture, with supportfrom Singapore, Japan and othercountries followers ofBuddhism, envisages theparticipation of several countriesincluding Sri Lanka, Thailandand China. The symposium wasvery well attended by overhundreds of Asian scholars,government officials andBuddhist monks and nuns fromSingapore, India, Thailand, Japan,China and many other countries.The President of India, Dr.A.P.J.Abdul Kalam, in his keynoteaddress delivered via livemultimedia videocast from NewDelhi, described the project as a“model for evolving a happy,prosperous and peaceful societyin our planet” and helpful in the“evolution of the enlightenedcitizen.”

At the symposium,Singapore’s Foreign MinisterGeorge Yeo, said that the projectwas not about the religion but“Buddhist values and philosophywhich have become an integralpart of East Asian civilization.” Yeoadded that as Asia re-emerges onthe world stage, Asians could“look back to their own pastand derive inspiration from it forthe future.” He further notedthat, “We should developNalanda as an icon of the Asianrenaissance, attracting scholarsand students from a much widerregion as the ancient universityonce did.”

Speaking at the symposium,Chinese Buddhist scholar Prof.Tan Chung, described Nalandaas “the oldest precursor of Oxfordand Cambridge - a fortress oflearning.’’ According to theChinese academic, “China wouldnot have been what it became butfor the beneficial cultural influenceof India. The advent of Buddhismmade a sea-change and China camealive as a popular land ofspiritualism and wisdom."

In a passionate plea, Prof.Wang Dehua, of the ShanghaiMunicipal Centre forInternational Studies, said thisproject would symbolize therebuilding of our old friendshipand understanding. In thefuture, we will be able to reachthe dream of an Asiancommunity with a project likethis.

Prof Tavivat Pantarigvivatof Thailand’s MahidolUniversity, offered Thailand’sexpertise in running suchBuddhist universities in thedevelopment of the project.With India emerging in the 21stcentury and becoming aknowledge-based society,“reviving Nalanda symbolizesthe hopes and aspirations ofSouth and East Asians that thecivilizations of Asia will rise againbased on knowledge andcooperation,’’ observed BalajiSadasivan, Singapore’s juniorminister for foreign affairs.

(Excerpted from the ipsnews.net, 15November 2006).

© ipsnews.net.

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NEWS Asian Countries Cooperate to Help

Revive Ancient Indian University-Nalanda

India Keen on

Asian Economic

IntegrationIndian Finance Minister, PChidambaram in his inauguralspeech at the third ‘Made in India’show organised by the CII inShanghai, said that India is readyto play an “active” role in promotingAsian economic integration and iskeen to cooperate with China inachieving the goal. He furtheradded that “India’s approachtowards Asian integration and itsrelations with Asia areincreasingly an important elementof our foreign policy. We are readyand committed to be an activeand positive player incontributing to the cause of Asianintegration.”

The Minister stressed thatIndia and China are two of themost important contributors tothe political and economicdynamics of Asia, as also of theworld.

The Finance Minister saidthat there are significantcomplementarities in India andChina but these countries haveeconomies that compete with eachother. Apart from this, there isample opportunity and space in theinternational economy for both thegrowing economies. The Ministerhoped that India-China bilateraltrade, which has already crossed the12.2 billion US dollar-mark duringthe first eight months of 2005,may even touch an all-time high of20 billion US dollars by the end ofthe year.

The Finance Minister showedconcern that both countries needto examine closely the narrow tradecomposition of the trade basket andthe insufficient use of each other’scomparative advantages. In thatcontext, he suggested that Indiaand China should look into areaslike agriculture, dairy industry, foodprocessing, auto components,pharmaceuticals, machine tools andinformation technology for mutualbenefit.

( Excerpted from The Hindu, 17 October 2006).

© The Hindu.

At the India-ASEAN TechnologySummit organized by the UnionMinistry of Science and Technologyand the Confederation of IndianIndustry (CII), India and ASEANhave agreed to create a joint fundfor development of science andtechnology in the region.

Announcing the agreement,Union Minister for Science andTechnology Kapil Sibal and theMalaysian Minister for Science,Technology and Innovation andthe leader of the ASEANdelegation, Jamaluddin Moham-med Jarjis, said the details of thefund would be worked out soon.The fund would be used forundertaking collaborative R&Dand technology development inareas of common interest,

including biotechnology andpharmaceuticals, agriculture forfood security and advancedmaterials.

The summit also decided todesign a regulatory framework byharmonizing the standards forbiotechnology products and theagricultural processing industry,and to establish an India-ASEAN Institute for IntellectualProperty to help build humanresource capacities and training.It also decided to create aknowledge grid covering Indiaand the ASEAN member-countries.

Mr. Sibal and Mr. Jarjis saidthe regulatory framework hadbeen thought of to cut down onthe huge costs involved in

India, ASEAN Agree to Create Joint Fund

getting approvals forbiotechnology products, and toensure that the value additionsthat would accrue would benefitthe people of the region. Theyasserted that while trying to cutcosts, there would be nocompromise on standards.

Mr. Jarjis said that ASEAN,which was hitherto looking to theWestern world for scientificdevelopments, now felt that Indiacould offer the same potential ata much lower cost. The groupingwas particularly interested in therapid strides being taken by Indiain the area of information andcommunications. (Excerpted from The Hindu, 11 November2006).

© The Hindu.


Asia New Destination for Young

Aussies

only around one-fifth of theworld’s output, yet it accountedfor over half of the world’spopulation. But today, Asia’s shareof the world output has risen toover one third, while its share ofthe world population hasremained much the same.According to him, it is largely theresult of the rapid developmentof China and India and furtherthis trend is set to continue.

On the occasion, he also saidthat, Asia’s share of world GDP isprojected to reach around 45 percent by 2030, compared with itsshare of global population, whichis projected to remain aroundhalf, which will be again largelydue to the continued rapidgrowth of China and India. Theeconomic and demographictransition occurring in Chinaand India is highlighted by therise of two of the region’s mega-cities - Shanghai and Mumbai,both of which are witnessing anunparalleled pace of development.

(Excerpted from theaustralian.news.com, 19December 2006).

© theaustralian.news.com.

As a part of the India-SingaporeComprehensive EconomicCooperation Agreement (CECA),India and Singapore are in theprocess to sign a mutual recognitionagreement (MRA) on professionalqualifications, in the comingmonths. This agreement is the firstof its kind that India will have withany country in the services sector.In this context, seven professionshave already been finalized, viz.chartered accountancy, costaccounting, company secretaryship, nursing, medicine, dentistryand architecture.

An MRA will ensure thatprofessional qualifications fromIndian universities and instituteswill be recognized by the partnercountry for the professionals to

practice there. It has been said thatthese agreement would be evenbigger than obtaining a visa andreally removes the entry barriers.

According to the T SVishwanath, head of CII’sInternational Trade Policy, “Theagreement is the first step. Aftersubsequent reviews, we will likemore services sectors to be added.There will be a gradual increasein the number of professionalsgoing to that country from India.Subsequently, India can alsobenefit from the expertise ofprofessionals from Singapore insome of these sectors.”(Excerpted from the Financial Express, 4

October 2006).

© Financial Express,

Vice President of Indonesia, Mr.Jusuf Kalla, speaking at theInternational Symposium on thePossible establishment of an EastAsian Free Trade Area organizedby the Centre for Strategic andInternational Studies (CSIS) andthe Japan Economic Foundation(JEF), warned that gapingincome disparities between thecountries of the region, as well asdiffering legal and governmentalsystems, and levels of infrastructuraldevelopment, could present majorhurdles to greater integration. Forthat, he stressed on the closereconomic cooperation among EastAsian countries as the key toincreased prosperity, and urgedbusiness people and governmentofficials to find ways of overcomingthe obstacles hindering economicintegration.

According to him, a numberof countries had per capitaincomes of less than US$1,000while others had per capitaincomes of more than US$20,000. Therefore, it could be aproblem if we pursue economiccooperation without closing the gapfirst, but it will take years toovercome the gap. So, the challengeis how to find a harmonious way ofachieving both, he told the

symposium. He also cited anotherchallenge, as how to combinedifferent levels of technologicaladvancement, human resourcesdevelopment and naturalresources endowment so as toproduce a solid economiccommunity that was able tocompete with other regions.

Above all, he also emphasizedto adopt Asian values in ourregional cooperation, because hefeels that these Asian values areinherent in ourselves. Hecharacterized Asian values as asystem of ethics that prioritizedcooperation over competition.

While acknowledging thatAsian values are important forimparting a sense of identity,economist Djisman Simandjuntakof the CSIS said that people wouldonly benefit from freer trade andfreer investment, if they improvedtheir competencies and skills.

He also told that anyagreement should focus preciselyon narrowing the gaps betweenless developed members and moredeveloped ones, and betweenpeople living in poverty andpeople living in abundance.(Excerpted from the Jakarta Post, 1December 2006).

© Jakarta Post.

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NEWSSingapore to Recognise Indian

Professionals

Jusuf Kalla Wants ‘Asian Values’ in

Trade Deal

Masahiro Kawai, head of the ADB’sOffice of Regional EconomicIntegration, told that Asia needs toinvest around $3 trillion ininfrastructure over the next decade,but only half of the requirementswill likely be met at the currentinvestment rate. He also told thatwhile the region has money to footthe bill, it will have to develop asystem such as a regional bondmarket to channel domestic savingsto infrastructure needs.

He said according to the recentestimates, Asia as a whole wouldneed to invest some $3 trillion overthe next ten years to keep up withthe growing demand for nationaland cross-border infrastructure-

Asia Needs to Invest US $3Trillion

in Infrastructure Over Next Decadeincluding tele-communications,transport, energy and water. Hewas of the opinion that at currentinvestment rates, less than half ofsuch demands for infrastructurewill be met, so at present there is anurgent need to bridge theinfrastructure gap quickly.

Kawai informed that ADB hasbeen providing around $5 billioneach year for infrastructure projects,less than 2 percent of the $300billion needed by the region everyyear. In that context, he said that

people’s savings must be mobilized.( Excerpted from the Inquirer.net, 2 October

2006).

© Inquirer.net

Mr Costello, the AustralianTreasurer, speaking at theAdvance 100 Global AustraliansSummit at the Sydney OperaHouse, told that the Australiansworking or studying overseas weremore likely to head to Asiancountries rather than Britain orthe US in future, due to theeconomic re-emergence of theAsian region, driven by the rapidgrowth of China and India.

He further added that thesituation has changed, asstudying overseas doesn’t meanonly NewYork or London but alsoShanghai and Hanoi, and in thefuture it will be Mumbai andJakarta and throughout the Asianregion - the fastest growth area inthe world.

He said with one-in-sixmembers of the Australiandiaspora in Asia, an Australianexpatriate community is alreadyemerging, reflecting an increasingintegration into the region as wellas wider global economic anddemographic trends.

Mr Costello was of theopinion that almost two and ahalf decades back, Asia produced


re-examine its relations in theregion. It said political andeconomic stability cannot betaken for granted, and urged theUS to seek ways to remain activelyengaged in the region whilehelping to create an environmentthat will ensure political stabilityand continued economic growth.

Thomas Donohue, Presidentand Chief Executive Officer ofthe US Chamber, said that itprepared the report as part of itsstrategy of seeking to increase theUS focus, resources and presencein Southeast Asia, which in 2005ranked as the United States’fourth-largest trading partner.The Chamber’s report revealedthat few regions of the world offerUS companies as muchopportunity as Southeast Asia.

Donohue said the Chamberand Southeast Asian AmChamsare stepping up their regionalprograms and intensifying theirlobbying in Washington “to

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NEWS

US Chamber and AmericanChambers of Commerce(AmChams) in Southeast Asia inits report entitled “Southeast Asia:Dynamic Opportunities for USCompetitiveness,” called for theUS to readjust its role and strategyin the region, as this is a delicateand critical time for the UnitedStates in Southeast Asia. Thereport warned that it is importantfor Washington to recalibrate itsrole and strategy in Southeast Asiato ensure a strengthenedcompetitive position for UScompanies in this critical market.

The report said the rise ofChina, India and other emergingeconomies is causing shifts inSoutheast Asia’s former economic,political and securityarrangements. It said new regionalalignments are being created. Thereport viewed that these dynamicshave created new challenges andopportunities for the UnitedStates and call for Washington to

reflect the heightened priority ofSoutheast Asia in the businessstrategy of American companies.”

The Chamber report saidenhanced regional integration inSoutheast Asia would improveeconomic growth and enhancepolitical stability. It also expressedsupport for efforts to negotiatebilateral free trade agreementswith Southeast Asian countries.

The Chamber said the USgovernment should invest ininitiatives that support regionaleconomic reform andintegration, hold Congressionalhearings to monitor US policyon commercial relations withAsian, streamline US visaprocedures, and continue USPresidential participation in themeetings of APEC, whichgroups key Asian nations, theUS and other countries. (Excerpted from the Daily Express, 16

November, 2006).

© Daily Express.

Washington Must Readjust Role and Strategy in South

East Asia

According to the summary of areport of the Asian DialogueSociety’s (ADS) Greater AsiaInitiative, ‘Shared Integration:Promoting a Greater Asia,’ India’s‘Look East’ policy, targeted atenhancing India’s standing inglobal politics, could spell successfor the entire South East Asiadepending on India’s ability tointegrate the interests of its NorthEastern states in its larger regionalambition, though Myanmarcould emerge as the Achilles’ heel.

The report explores thecritical nexus between India andSouth East Asia and the manydimensions of India’s role inGreater Asia. It maintains thatIndia has adopted aconfigurational approach towardsregionalism, which is episodic inessence in which certain strategicconfigurations dominate,depending on the geopolitical orgeo-economic environment. Indiaperceives Association of SoutheastAsian Nations (ASEAN) as the

stepping stone towards achievingher regional objectives andbalance in the global power play.

The report argues that theLook East policy was embeddedin its historical commitment tobuild Asian solidarity as reflectedin the 1955 BandungDeclaration. It recommended‘shared integration’ for a creativefusion of India’s interests with theregion’s priorities.

The report cautions that theprogress of the Look East policywould be dictated by India’sability to integrate the interests ofthe North Eastern states in itslarger regional ambition. As such,the report studies the realities ofethno-nationalism and sub-regionalism in North EasternIndia in the context of intra-regional relations, and theirimplications for the realisation ofshared integration.( Excerpted from the Hindustan Times, 16November 2006).

© Hindustan Times.

Look East Policy May Spell Success

for South East Asia

Deputy CEO of Doha Bank, RSeetharaman in his address to theJoint International InvestmentForum organised by theCommonwealth Business Counciland the Union of Arab Banks inLondon, has said that the GCCcountries are well-poised for asubstantial growth in non-oil sectoras well due to its fiscal surpluses.GCC countries are consciouslypursuing diversification, efficiencybuilding, and creating long-termprosperous economic models,capable of absorbing any sector-specific shocks.

Seetharaman said that “With their strong financial base,the GCC countries are betterpositioned to take a lead in thissynergistic approach. On the Arabworld, he said it should providewide-ranging reforms, a regulatoryframework, investment climate,infrastructure and informationsharing to attract more FDIs. SomeGCC countries have taken up fastreforms and are offering a 100 percent ownership and efficientregulations, conducive labour lawsand international mechanisms fordispute settlements.

Further, Seetharaman saidthat the Asian Block representing60 per cent of the global populationspread over 53 countries has a strongmanufacturing base, establishedservice sectors and vibrant financialcentres. Asian block also has threeof the fourth largest economies ofthe world - China, Japan and India.India being one of the largesteconomies of the world has a hugehuman capital and is an emergingglobal back office processingcentre. With an established andskilled manpower base in Asia andwith a perpetual power shortagesituation in Europe, GCC is wellplaced to optimise its strong oiland gas reserves for a significantgrowth in the global industrialsector.( Excerpted from the Gulf Times.com 31October 2006).

© Gulf Times.com.

GCC ‘Poised for

Substantial

Growth in Non-

oil Sector’

India is Japan’s

‘Special Economic

Partner’Addressing a gathering at the GCCIin Ahemadabad, Japanese envoy toIndia, Yasukuni Enoki, informedthat Japan will extend ‘specialeconomic partner’ status to India,as Tokyo had not extended such astatus even to its neighbours likeChina and South Korea.

He said that, “We rankASEAN as our top business partnerin Asia. After that we are extendingthe special economic partnership toIndia.” Further, Enoki revealedthat, “If we go in retrospect, Japanused to see India as a local playerfew year’s ago. Now, there is a drasticchange in our viewpoint and weconsider India as one of the threemajor powers in Asia besides Japanand China.”

Enoki said they would expectthat GDP of India, China andJapan will be same by 2030 andIndian GDP will overtake that ofJapan after 2030.(Excerpted from the Financial Express, 21November 2006).



world merely mirrors the experience of thedeveloped? It is not just that Third Worldhouseholds may not be able to afford westernconsumption standards, our planet wouldnot be able to do so.

The rise of Asia, and of the developingworld in general, presents us with newchallenges – new intellectual challenges, newtechnological challenges, new organizationaland political challenges.(Excerpted from the Address delivered to the LondonSchool of Economics ASIA FORUM, New Delhi, 7December 2006).(The full speech is available at http://pmindia.nic.in/speeches.htm).

India-ASEAN TechnologyCooperation H.E. Ong Keng Yong,

Secretary-General, ASEAN

This 2006 India-ASEAN TechnologySummit and Technology Platform event

was first proposed by Prime MinisterManmohan Singh of India at the FourthASEAN-India Summit two years back. TheASEAN Leaders supported this initiative asa means to further strengthen ASEAN-Indiarelations.

The ASEAN-India have expandedand intensified cooperation in manysectors. In particular, special attention hasbeen paid to science and technology.Science, technology and innovation canbe powerful determinants and enablers ofeconomic development, educationalprogrammes and protection of theenvironment. India’s transformation inbecoming one of the world’s fastestgrowing economies is an oft-cited example.

To remain globally competitive,ASEAN member countries have to moveup the technology ladder and focus onenhancing their capabil i ty fortechnological innovation, particularly inthe areas of biotechnology, ICT andmicroelectronics, among others. The

The Rise of Asia : The MostImportant Development ofthe 21st CenturyDr Manmohan Singh,Hon’ble Prime Minister of India

The most important development of the21st century will be the rise of Asia.

China has already trebled its share of worldGDP over the past two decades and Indiahas doubled it. Both these giant economiesof Asia are bound to gain a considerable partof their share of world GDP that they hadlost during the two centuries of Europeancolonialism. While Japan will continue to beat the top in the foreseeable future, the newlyindustrializing economies of East and SouthEast Asia will also grow, even if not at rateswe witnessed in the past two decades.

Taken together, the rise of these Asianeconomies will alter the balance of incomedistribution at the global level. This neednot worry the West, since a dynamic Asiacan power global growth and provide newopportunities for growth for Europe as wellas for North America.

One of the re-assuring aspects of theon-going growth process is that it is moreorderly. Just as the world accommodated therejuvenation of Europe in the post-Warworld, it must now accommodate the rise ofnew Asian economies in the years ahead.

It means that we need global institutionsand new global “rules of the game” that canfacilitate the peaceful rise of new nations inAsia. It also means that existing globalinstitutions and frameworks of cooperationmust evolve and change to accommodate thisnew reality. This is as true for the reform andrevitalization of the United Nations and therestructuring of the United Nations SecurityCouncil, as it is true for the management ofmultilateral trading system, for the protectionof global environment and the security ofenergy supplies.

We often say that globalization is a realitythat we must contend with. We also say thatglobalization offers opportunities as muchas it poses challenges. That peoples andnations must learn to deal with both. But,there are still many unsettled questionspertaining to globalization. Even thediscipline of economics has not addressedthe phenomenon in a holistic manner.

There are questions pertaining to theglobalization of lifestyles, and itsconsequences for consumption, and theirimpact on the world environment. Is growthsustainable if development in the developing

ASEAN leadership has encouraged theS&T community in ASEAN to be moreinnovative and entrepreneurial. Strategicpartnerships between public researchorganizations and industry could beestablished to facilitate technologydevelopment, joint R&D undertakings andtechnology transfer. We in ASEAN recognizethat engaging the business community iscrucial in determining the competitivenessand the marketability of technologies andtechnology products. The development andmarketing of new and affordable drugs isjust one of many examples of why the privatesector collaboration is important.

Given the geographic proximity and ashared interest in harnessing science,technology and innovation towards economicdevelopment, it would be a pity if technologicaland commercial partnerships between ASEANand India only remain at a low level.Strengthening the ASEAN-India partnershipin S&T could facilitate knowledge creationand innovation which in turn could be madeinto useful and commercially-viabletechnologies that can lift the quality of life ofthe citizens of ASEAN and India. We are talkingabout improving the lives of one quarter of theworld’s population.

We should look for opportunities forASEAN member countries and India toleverage on one another’s strengths, andconsider partnerships rather than viewingone another solely as competitors. Andwith ASEAN and India working toestablish an ASEAN-India Free Trade Area,there will be potentially even more roomfor the business and scientific communitiesin ASEAN and India to transact with eachother.

In order to strengthen the ASEAN-India S&T partnership, there is need toorganise regular high-level consultationsbetween industry associations and S&Tofficials. The regular meetings of the ASEAN-

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OPINIONSThe Asian Renaissance

As Asia re-emerges on the world stage in this century, its civilizational origins willbecome a subject of intense study and debate. Asians will look back to their own past andderive inspiration from it for the future. This inspiration will cover the entire spectrumincluding governance, scientific inquiry, architecture and aesthetics. A tremendous burstof creative adaptation is becoming evident across much of Asia. The Western world wentthrough a similar phase as it emerged out of the medieval ages. Hence the word ‘renaissance’has come to be applied to Asia’s re-emergence today.

-Excerpted from the Speech by George Yeo, Singapore Minister for Foreign Affairs, at the

Nalanda Buddhist Symposium on 13 November 2006.


India Working Group on S&T (AIWGST)and ASEAN Committee on S&T (COST)could be used as event platforms. We shouldtap the expertise of the private sector in theformation of technology-based businessesand R&D and encourage the Indianbusiness and scientific communities toparticipate in regular ASEAN events such asthe ASEAN S&T Week (ASTW) which isheld once every three years.

There is need to encourage theASEAN and Indian public and privatesectors to explore the possibility of jointundertakings in the field of biologicalprospecting to explore diverse species in Indiaand ASEAN for commercially valuablebiological and genetic resources.(Excerpted from the Remarks at the India-ASEANTechnology Summit and Technology Platform Event, NewDelhi, India, 6 November 2006).

Global Asia: ChangingRealities, New PrioritiesLiqun Jin,

Vice President, ADB

Over the last several decades, Asia’senduring dynamism in growth has

been driven by several engines, like Japan,the first Asian country to become anadvanced industrial economy; the “Asiantigers,” which include, among others,Malaysia, Korea and Singapore; and morerecently the new powerhouses, the People’sRepublic of China and India. Today, Asia’sGDP is approaching 30 per cent of worldGDP and, its economic achievements havebeen accompanied by dramatic povertyreduction.

However, this remarkable progress shouldnot obscure the daunting developmentchallenges faced by this region. Spreading thebenefits of growth more evenly around theregion is therefore essential to Asia’s future –and to a future of global stability and prosperity.Indeed, achieving development for all couldbe more challenging than achievingdevelopment itself.

Regional cooperation and integration isan important key to meeting this challenge.Through the expanded markets, intra-regional supply chains and stronger financiallinkages that regional cooperation fosters, thesmaller and lesser developed economies canbenefit from and also contribute tosustaining the region’s growth momentum.

In East Asia, rapid technologicaladvances, robust economic growth and

liberalization of regimes have boosted intra-regional trade. Intra-regional foreign directinvestment is also substantial. While Asia’seconomic integration has been largely market-driven, it is also a credit to all theaccommodating governments, who haverecently further strengthened their effortsto build or improve mechanisms forcooperation at the strategic and policy levels.

Under the GMS Program initiated in1992, the governments of countries alongthe Mekong River, some of which are nowalso ASEAN members, are involved insubregional projects and programs to sustaineconomic growth and solve commonproblems. Their commitment to cooperatehas significantly improved physicalconnectivity and virtually transformed theeconomic and social landscape of the GreaterMekong Subregion. Similar initiatives areunderway in Central Asia through theCAREC program. Recently in their meeting,leaders from across the region endorsed aComprehensive Action Plan for cooperationin areas like regional infrastructure networks,trade and investment, business developmentand knowledge sharing. This should be amajor step towards reintegration of one ofthe most resource rich and strategicallyimportant regions in the world.

If managed successfully, Asia’sintegration will facilitate a more balancedand sustainable process of globalization.However, building a truly pan-Asianeconomic community will require muchmore involvement from the region’s largesteconomies.

To promote deeper integration, Chinacould also use its enormous reserves for publicinvestment in infrastructure, fordevelopment aid within the region, and toencourage greater private investment. Andnow that India is looking east, these twogiant economies can, over time, even playa useful role in bringing East Asia andSouth Asia together.(Excerpted from the Statement delivered at the Asia Pacific Summit

2006 Opening Plenary, 26 October 2006, Vancouver, Canada).

Asia's Emerging Giants haveSome CommonalitiesGuy de Jonquières,Financial Times

The only obvious similarities betweenIndia and China are that each occupies

much of Asia’s land mass; each is populous;each is poor; each is growing fast and each ishungry for natural resources. However, inmost ways, the two countries are polar

opposites. China is a communist autocracythat has instituted sweeping economicreforms, opened its economy to the worldand mobilised vast resources fordevelopment. On the other hand, India isan unwieldy democracy whose last bigeconomic reforms were forced on it byfinancial crisis in 1991, since when politicalgridlock has frustrated liberalisation. Chinahas thrived because of government policies;India has prospered in spite of them.

China’s rise has broadly followed a welltrodden east Asian path, being investmentand export-driven and fuelled by abundantdomestic savings. India, with a more closedeconomy and far lower savings rate, dependsheavily on domestic consumption to sustaingrowth. China struggles to control excessivefixed asset investment, while India isconstrained by scarce capital and woefullyinadequate infrastructure spending.

Low-cost production is the engine ofChina’s real economy. Indian manufacturingstill generates a small share of national output– as do its much-vaunted software andservices industries. India has a reasonablysound banking system and a long-establishedstock exchange. China’s banks have yet tolearn how to price risk and lend prudently,and its equity market is primitive.

Furthermore, the two economies interactonly at the margins. While bilateral trade hasgrown fast, India accounts for only 1.3 percent of China’s exports. Almost 8 per cent ofIndia’s exports go to China. But, to the former’schagrin, most are low-value commodities, whiletrade in the opposite direction is dominatedby manufactured goods. Two-way investmentremains a trickle and each side complains of thedifficulty of operating in the other’s market.By most measures, China today is more deeplyintegrated economically with the US than withIndia.

Those disconnections make it fancifulto suppose that the nascent dialogue betweenChina and India will lead to rapidbreakthroughs in economic cooperation. Atthis juncture, it is for these two countries todecide that which route will prove moreeffective. Near-term, the main risk in Chinais that failure to deal with the root causes ofwasteful over-investment will turn boom intobust. In India, it is that failure to modernisethe country’s creaking infrastructure willchoke off growth.

On the downside, a global economicdownturn would hurt both. India, lessdependent on exports, might appear better

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An Indo-Japanese strategic partnershipshould seek to build greater defensecooperation, intelligence-sharing and jointinitiatives on maritime security, counter-terrorism, disaster prevention andmanagement, and energy security. Tomaintain a peaceful environment, Tokyo andNew Delhi need to promote institutionalcooperation in Asia. In that context, Abe’sidea of a four-sided strategic dialogue amongJapan, India, Australia and the U.S. deservescareful reflection. A constellation ofdemocracies tied together by strategicpartnerships can help build Asian powerequilibrium. In the emerging Asia, the twomajor non-Western democracies, Japan andIndia, are set to become close partners andtheir strategic relationship would help adjustbalance-of-power equations in Asia and aidlong-term stability. (Excerpted from The Japan Times, 14 December 2006).© The Japan Times.

The Rise of Asia as anEconomic Power houseSudhir T Devare,Visiting Senior Research Fellow,ISEAS, Singapore

The story of Asian regionalism has beenunfolding constantly, even as the

major economies of the continent continueto grow at an undoubtedly impressive rate.In the new millennium, the rise of Asia asan economic powerhouse, propelled bythe rapid and simultaneous economicexpansion of China and India, the revivalof Japan and Korea, the continueddynamism of ASEAN states, and growingcooperation among Asian countries havebeen attracting attention and also helped

placed to weather the storm. But its relianceon short-term capital inflows from abroadto finance growth could make it vulnerableif global investors deserted emergingmarkets.

While giving hope to many, it is alsosharpening the disparities between anaffluent urban elite and vast numbers of ruralpoor eager for a better life. Meeting thoseaspirations and maintaining social stabilityposes a huge test for the country’s politicalsystem. In that respect, at least, China andIndia have something in common.(Excerpted from the Financial Times, 30 November 2006).

© Financial Times.

Japan-India Partnership Keyto Bolstering Stability in AsiaBrahma Chellaney, Professor,Center for Policy Research,New Delhi

Japan and India are natural allies because theyhave no conflict of strategic interests and

actually share common goals to build stability,power equilibrium and institutionalizedmultilateral cooperation in Asia.

India, for its part, has recognized thatit can wield international power onlythrough the accretion of its own economicand military strength. A close strategic andeconomic partnership with Japan chimeswith its vision of a dynamic, multipolarAsia.Though Abe has optimistically statedthat “it will not be a surprise if in anotherten years, Japan-India relations overtakeJapan-U.S. and Japan-China relations.”

A key challenge for both Tokyo andNew Delhi is to manage their increasinglyintricate relationship with Chinadetermined to emerge as Asia’s dominantpower. Yet it makes sense for Japan and Indiato play down the competitive dynamics oftheir relationship with Beijing and put theaccent on cooperation. An emphasis oncooperation also suits China because it is inaccord with its larger strategy to advertise its“peaceful rise.”

A strong Japan, a strong China and astrong India need to find ways to reconciletheir interests in Asia so that they canpeacefully coexist and prosper. Neverbefore in history have all three of thesepowers been strong at the same time. Thesharpening energy geopolitics in Asia alsoundergirds the need for a strategicpartnership between Japan and India,both heavily dependent on oil imports bysea from the Persian Gulf region.

the process of economic integration in Asia.The Asian financial crisis of 1997-98,

however, provided an impetus to regionaleconomic cooperation and policycoordination, as Asian economies wereseverely disrupted by certain aspects ofglobalisation.The first East Asia Summit canbe described as a logical corollary of this trendwhere ten ASEAN countries, along withChina, Japan, Korea, India, Australia andNew Zealand came together in pursuit ofthe dream of East Asian economiccooperation and integration.

Since the crisis, Asia has seen a majortrade and investment expansion. Thedramatic increase in intra-Asian trade andthe growing interdependence has provideda new impulse to integration within Asia.

This growing economicinterdependence and integration in Asia,largely through complementarities andrecognition of mutual advantage, has givenrise to a rapid increase in regional or sub-regional arrangements, including FTAs orCECAs. Such agreements go far beyondtheir commercial or economic utility and canalso act as useful building blocks fordeveloping overall closer understanding andcooperation.

The emerging web of FTAs and a seriesof initiatives could lead in a phased mannerto a possible Asian Economic Community,which India has been advocating for quitesome time.

Asian economic integration, which hasprogressed relatively rapidly in a short spanof time, would be best served throughinstitutionalisation and setting up of rules.However, the recent East Asia Summitprovided a suitable opportunity to

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India-China Friendship will lead to World PeaceThe deep historical and cultural association that our ancient civilizations share has

made rich contributions in shaping the development of humanity and gives a uniquedimension to India-China relations in contemporary times. The remarkable growth anddiversification of India–China relations in recent years are a matter of satisfaction and givesoptimism for the future of our relations. Today the footprints of India and China areincreasingly visible and have made an impact on the global landscape in diverse areas. Ourcommon pursuit of a peaceful environment for the paramount task of achieving nationalconstruction and prosperity adds great values to the India–China partnership.

-Excerpted from the Address delivered by President of India Dr. APJ Abdul Kalam at theFriendship Year Commemorative Function during the Visit of His Excellency Mr. Hu Jintao, Presidentof the People’s Republic of China, 21 November 2006.

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even the rest of the world’s welfare.Therefore, it is likely to be a case of win-winfor Asia and the world.

Given that Asian countries are amongthe most dynamic in the world, Asianregionalism has the potential to providepreferential access to some of world’s largestand most dynamic markets. An additionaladvantage of regionalism is its role inimproving relations between the partnersand bringing about peace and sharedprosperity with growing interdependence.

Furthermore, in so far as it leads to tradeliberalization, regionalism by developingcountries should be viewed as a buildingblock of multilateralism rather than astumbling block. East Asia has emerged asIndia’s largest trading partner ahead of NorthAmerica or the EU. The East Asia Summit

consolidate the gains of economicintegration underway in Asia and placedthe process on a durable basis.(Excerpted from the Financial Express, 1 December 2006).


The ‘Arc of Advantage’ willBenefit the WorldNagesh Kumar,

Director General, Research and

Information System for Developing

Countries, India

Although India has been a faithful adherentto the multilateral trading system along

with other major Asian countries like Japanand South Korea, among others, they wereforced to look at the potential of regionaleconomic integration in the current decade bythe emerging global trends.

More that 60 percent of world trade isnow conducted on preferential basis ratherthan on most favoured nation (MFN) basis.It has implications for all other countries.Studies show that RTAs have emerged asmajor factors in determining patterns of tradeand investment. They make RTA membersmore attractive destinations of investmentsand more competitive partners in trade atthe disadvantage of non-members.

Therefore, any region can ignore theformation of its own scheme of regionalintegration only at its peril. Hence, otherregions responded by forming their ownRTAs such as the Mercado Común del Sur(MERCOSUR) and the Andean Pact inSouth America, and the Common Marketof Eastern & Southern Africa (COMESA)and the Southern African Customs Union(SACU) in Sub-Saharan Africa. Currently,some 300 RTAs or bilateral free tradeagreements (FTAs) are at different stages ofimplementation around the world.

Furthermore, judging from theproposals currently on the table of the DohaRound, countries like India will have todeliver more in terms of providing marketaccess in agriculture and industrial goodsthan they could be hoping to get fromdeveloped countries.

On the other hand, studies conductedby the Research & Information System forDeveloping Countries (RIS) and the AsianDevelopment Bank have shown thatregional economic integration hassubstantial welfare gains that can be reapedby Asian countries . In view of thecomplementary economic structures, Asianeconomic integration is seen to be raising

(EAS), a new regional forum combiningASEAN, its dialogue partners and Australiaand New Zealand holds the key to launchinga scheme of broader economic integration inAsia.

India sees the bilateral engagements withthe Asian countries as building blocs of abroader Asian Economic Community thatcould be an ‘arc of advantage’ for peace andshared prosperity, to quote the PrimeMinister.

Therefore, a focus on Asian regionalismin India’s current trade policy is certainlytimely and well conceived while playing ourrole in strengthening the multilateral tradingsystem as much as possible.(Excerpted from the Financial Express 11 December,2006).


Further Readings

� China, India Urged to Open up on ODA to Africa, The Japan Times, 27 December2006.

� The Rise of pan-Asian Culture, Joshua Kurlantzick, Koreaherald.co.kr, 13 December2006.

� World Bank Sees Slower Growth But Still Rosy Outlook for Asia, International HeraldTribune, 13 December 2006.

� East Asia Summit and Economic Integration, Nagesh Kumar, The Jakarta Post.com, 13December 2006.

� India’s Economic Engine Could Reach China Speed, Asian Wall Street Journal, 11December 2006.

� Towards Asian Economic Integration, Nagesh Kumar, Economic Times, 11 December2006

� Japan Should Look Towards Asian Neighbours In EAC Initiative, Bernama.com, 6December 2006.

� Asia’s Economic Future Up in the Air, Literally, William Pesek, Bloomberg, 6 December 2006.

� ASEAN+3 Summit And EAS Should Avoid Duplication, Bernama.com, 5 December2006

� Asian Currency Index Now, Economic Times, 28 November 2006.� FICCI Urges Focus on Five Trade Areas With China, Hindu Business Line, 22

November 2006.� China-India Strategic Partnership, Nagesh Kumar, Financial Express, November 19

2006.� China-India Investment is a One-Way Street, Financial Express, 16 November 2006.� Look East Policy May Spell Success For SE Asia : Report, Hindustan Times.com 16

November 2006.� India-China Bilateral Trade is in for Further Growth, Financial Express, 16 November

2006.� India Exploring Possibility of Inking FTA with Russia, Financial Express, 11 November

2006.� U.S. Wary of Move for East Asian Economic Integration, Daily Yomiuri Online, 9

November 2006.� Trade With Singapore in India’s Favour, Business Standard, 2 November 2006.� Three Sides of the East Asian Triangle, Joseph S Nye, Financial Express, 27 October

2006.

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New East Asian Regionalism: Causes,Progress And Country PerspectivesCharles Harvie, FukunariKimura andHyun-HoonLeeEdward Elgar Publishing,2006.ISBN-10: 1845420071

East Asian countries – currently the mostdynamic region of the global economy-haverecently pursued trade liberalization throughthe adoption of various forms of bilateral andplurilateral FTAs. The book explores the keyissues and possible outcomes arising from thisdeparture from the region’s traditionalmultilateral approach to trade liberalization.Implications of this new approach for the regionas a whole, and key participating individualeconomies and blocs of economies areemphasized.

Advancing East Asian RegionalismMelissa CurleyRoutledge, 2006ISBN-10: 0415349095Developments in East Asiahave progressed rapidly interms of regionalism since the1997 crisis. The end of theAsian miracle called into question not onlythe capacity of regional states to meet theneeds of their attendant peoples, but alsochallenged the viability of regionalorganizations, such as ASEAN, to adapt andrespond to the changing circumstances.

Advancing East Asian Regionalism looksat the ways in which ASEAN has expandedsince the crisis and evaluates the potential ofEast Asia to come together in a regionalformation. This volume draws upon theknowledge base of academics and policy-makersactively engaged in the contradictory issues ofregionalism

India-Singapore CECA –Comp-rehensive Economic CooperationAgreement : The Investor’s GuideWong PartnershipLexisNexis, 2006ISBN : 981-236-473-0One of the most recent andsignificant development forSingapore is the signing of theIndia-Singapore CECA in2005. The bilateralagreement, aimed at improving tradebetween the two countries, is also expected

to open up investment opportunities in areassuch as education, science, air services, media,e-commerce, intellectual property andadvance flow of human resources. It opensup tremendous commercial opportunities inIndia for Singapore-based businesses to takeadvantage of and vice-versa.

The present book highlights thepreferential market access features and manybenefits contained in key CECA provisions.Contributors from the diverse backgroundsprovide insights on India’s recent economicdevelopments, highlight industry sectors ofpotential opportunities, translate key CECAprovisions into simple language.

China and Southeast Asia : GlobalChanges and Regional ChallengesEditors- Ho Khai Leong and Samuel C.Y.KuISEAS & CSEAS, 2005ISBN : 981-230-298-0

The relations between ASEANand China occupy a unique andimportant position in the foreignrelations of the Asia-Pacificregion. China and SoutheastAsia’s political, strategic and economicimportance in the realm of internationalrelations has been transformed by the region’sunprecedented economic growth, unexpectedfinancial crisis, and turbulent political changes.The present book investigates the impacts ofglobal changes and regional challengesconfronting the contemporary developments

of China-ASEAN relations.

China and India : Learningfrom Each Other Reforms andPolicies for Sustained GrowthIMF, 2006ISBN: 1589065190

What does the future hold forthese giants that are the twofastest-growing emergingmarkets and among the threelargest economies in Asia? Theireconomic muscle is having increasingly far-reaching effects on the global economy.This must-read new book draws togetheranalysis and insight from high-levelpolicymakers and advisors in bothcountries, and shows how, for many years,the two countries have cooperated andlearned from each other. In addition, itoffers some concrete suggestions abouthow each may achieve long-termsustainable development.

Globalization And East Asia:Opportunities And ChallengesEditor : Khosrow FatemiInternational Business Press,2006ISBN -10: 0789027445This book examines differentaspects of the economicperformance of the region over the pastthree decades, with a focus on what it takesto replicate the experience elsewhere. Thiscomprehensive volume presents aninsightful four-part view of the intricateeconomic workings of East Asia. The firstpart introduces the distinctive qualities ofthe policies that sparked economic growthand development. Part two providescomparative studies of different countriesand industries in the region and an in-depth study of the East Asian area overthe past fifty years. Part three presentssector specific studies within severalcountries, focusing on internationalf inance. The fourth part spotl ightsimportant industry-specific elements andexplores the future of globalization inrelation to its effects on East Asia.

The Four Little Dragons: TheSpread of Industrialization inEast AsiaEzra F. VogelHarvard University Press, 2006ISBN-10: 067431526XThe book provides acomprehensive explanation ofEast Asia’s industrialbreakthrough. While othershave attributed this success totradit ion or to nationaleconomic policy, Vogel’s penetratinganalysis i l luminates how culturalbackground interacted with politics,strategy, and situational factors to ignitethe greatest burst of sustained economicgrowth the world has yet seen. He traceshow each little dragon devised a structureand a strategy to hasten industrializationand how firms acquired theentrepreneurial ski l l , capital , andtechnology to produce internationallycompetitive goods. Vogel brings masterlyinsight to the underlying question of whyJapan and the little dragons have been soextraordinarily successful in industrializingwhile other developing countries have not.

• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • reso• resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resources • resoRESOURCES


Political Economy of South-EastAsia: Markets, Power andContestationEditors- Garry Rodan, KevinHewison and Richard RobisonOxford University Press,USA; 3 edition, 2006.ISBN-10: 019551758XAs market economic systems extend oversoutheast Asia, the debate over what role thestate should play and what political regime isnecessary for economic growth is hotlycontested. This revised and updated textexamines the political economy of specificcountries in the region and follows with athematic and comparative analysis of key issues.

East Asian Visions: Perspectives onEconomic DevelopmentEditors-Indermit Singh Gill, YukonHuang and Homi J. KharasWorld Bank Publications, 2007ISBN-10: 0821367455ISBN-13: 978-0821367452The present book is a collectionof essays that reveals that howsome of the most influentialthinkers in East Asia view thesechallenges and how competitionwith the west has bred success;how crises in the region have provokedintrospection; and how the rise of China iscatalyzing change.

How can East Asia’s growth success beexplained? Can all countries benefit fromChina’s success, or will some be crowded out?Will regional integration aid efficiency or will itbecome a source of vulnerability? How canEast Asian countries deal with the growingdomestic concerns such as inequity, slumpollution, and corruption?

Chindia: How China and India AreRevolutionizing Global BusinessEditor : Peter EngardioMcGraw-Hill; 1 edition, 2006ISBN-10: 0071476571ISBN-13: 978-0071476577The economic rise of China andIndia has changed the way theworld does business-and today’scompanies need to step up theirgame. With a diverse array ofviewpoints, ideas, and forward-thinking strategies, Chindiadiscusses new avenues businesses can use toembrace change and encourage growth.

International Economic IntegrationAnd Asia (Advanced Research inAsian Economic Studies)Editors – Erik Jones andMichael G PlummerWorld Scientific PublishingCompany, 2007ISBN-10: 9812567577ISBN-13: 978-9812567574Regional economic integration has becomea key force in international commercial policyin the 2000s. Europe has traditionallyembraced regionalism; the United Statesbecame actively involved in preferentialtrading arrangements only in the 1980s.While Asia has been late in accepting formalregional economic integration accords, allAsian countries are now in the process ofcreating various free-trade areas and otherforms of economic integration programs, andsome are already in place. This volumeanalyzes the regionalism trend from an Asianperspective. It considers the lessons from,

and the economic implications of, variouseconomic integration programs in theOECD (mostly the EU but also NAFTA),as well as the proposals for closer economicintegration in the region itself. Chapters dealwith both real and financial integration

issues.

India’s Regional Trading ArrangementsRajesh Mehta and S. NarayananThis paper presents a brief non-technicaloverview of the conceptual basis of RTAs byhighlighting the implications of conceptslike trade creation and trade diversion. Thepaper then moves to pinpointing some ofthe global trends in RTAs to place the Indianengagements in a perspective. The patternsof India’s regional economic initiatives areanalyzed by presenting the factual accountof the same. A brief overview of possiblewelfare and human developmentimplications of RTAs in general and of Indiain particular are also dealt.(RIS Discussion Paper No. 114, 2006)

New Asia ForumRIS has been supporting the process of regional economic integration in Asia with its studies andresearch. Besides its pioneering contribution to the process of economic integration in South Asia, it hasbeen supporting the ASEAN-India economic partnership. It has been developing proposals of abroader pan-Asian economic integration as a part of a research programme supported by the SasakawaPeace Foundation. As its most recent initiative, the RIS has set up a New Asia Forum as a dedicatednetwork of think-tanks in Asia devoted to assist this process of regional integration and thus help inbuilding a New Asia with ideas. The Forum has a dedicated website www.newasiaforum.org as themelting pot for all the relevant information and resources on the subject.Feedback and contributions are invited from all concerned. Interested readers may join the forum andsend relevant material for publications.

RISRIS is an autonomous policy think-tank, based in New Delhi, and specialised in trade anddevelopment issues. Its work programme focuses on multilateral trade negotiations, regionaleconomic integration in Asia, new technologies and development, and South-South cooperation ingeneral, among other issues. The work of RIS is published in the form of research Reports, books,discussion papers and journals. For more information about RIS and its work programme, pleasevisit its website: www.ris.org.in.

Core IV-B, Fourth Floor,India Habitat CentreLodhi Road, New Delhi-110 003, India.Ph. 91-11-24682177-80Fax: 91-11-24682173-74Email: [email protected]: http://www.ris.org.inhttp: newasiaforum.org

The New Asia Monitor is a quarterly of the New Asia Forum launched by RIS. It seeks to disseminatethe news, viewpoints and information about resources among the policy circles and think-tanks topromote the cause of regional economic integration. The information contained has been compiledfrom various sources, as cited, purely for educational and dissemination, and not commercial, purposes.The copyrights of the material included remain with the original sources. The New Asia Monitor isavailable free from RIS or can be downloaded from www.newasiaforum.org.

RISResearch and Information Systemfor Developing Countries

Associate Editor: Beena Pandey

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India-Japan Economic Complementarities for Greater...

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